Two driving schools owned by the AA have been ordered to refund over 80,000 customers and pay a £4.2 million fine by the UK competition watchdog for engaging in “drip-pricing”.
The Competition and Markets Authority (CMA) found that AA Driving School and BSM Driving School illegally omitted a mandatory £3 booking fee from their advertised upfront prices.
This practice, known as drip-pricing, meant learner drivers were not shown the full cost initially.
Individual refunds will vary based on the number of lesson packages purchased, averaging around £9 per customer, totalling more than £760,000. The combined refunds and penalty will amount to nearly £5 million.
This marks the first financial penalty issued by the CMA for a breach of consumer law since it gained new enforcement powers.
CMA chief executive Sarah Cardell said: “If a fee is mandatory, the law is clear: it must be included in the price from the very start – not added at checkout – so consumers always know what they need to pay.
“At a time when people are watching every pound, dripped fees can tip the balance. And when it comes to something as important – and costly – as learning to drive, people deserve clarity.
“With our new powers, it will never pay to break the law or treat consumers unfairly. Where the rules are ignored, we’ll step in to put things right.”
A spokesperson for AA driving schools said: “Although the £3 booking fee was made clear to customers prior to their purchase, we acknowledge it should have also been displayed at the start of the online booking journey.
“Having listened to the regulator, we made immediate changes to our website to make the £3 booking fee more prominent.
“We are now refunding all relevant customers. Whilst we are disappointed with the outcome of the investigation, we have fully co-operated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years.”
Affected customers do not need to take any action, the CMA said.
The AA Driving School or BSM Driving School will write to them stating that the money will be automatically refunded onto the card they used to pay for their lessons.
If that is not possible, they will be sent a cheque.
In 2023, the Department for Business and Trade found nearly half of online businesses used dripped fees, with consumers spending up to £3.5 billion per year as a result.
