More than 80,000 learner drivers are now set to receive refunds, following an investigation into pricing practices that added mandatory fees late in the booking process. The case highlights growing scrutiny of online sales tactics across multiple sectors.
The Competition and Markets Authority (CMA) found that AA Driving School and BSM Driving School did not include a compulsory £3 booking fee in their initial advertised prices. According to the CMA, this meant customers were not shown the total cost at the start, as required under UK consumer law.
As a result, the AA, which owns both schools, has been ordered to refund more than £760,000 to affected customers and pay a £4.2 million fine. The combined financial impact approaches £5 million, reflecting both compensation and penalty.
Regulator Targets Hidden Pricing Practices
The CMA’s investigation revealed that between April and December 2025, customers booking lessons online were initially shown prices that excluded the mandatory booking fee. According to reporting from The Guardian, the full cost was only revealed later in the checkout process, after users had selected lessons and entered personal details.
For returning customers, the fee was displayed separately and only incorporated into the final total on a subsequent page. This approach, known as drip pricing, is considered illegal because it can mislead consumers into making decisions based on incomplete pricing information.
CMA chief executive Sarah Cardell stated that mandatory charges must be included from the outset so consumers “always know what they need to pay”. She added that such practices can influence decisions, particularly in a cost-sensitive context like learning to drive.
The regulator noted that cooperation from the AA, including an early admission of wrongdoing, led to a 40% reduction in the financial penalty. This is the first time the CMA has issued a direct financial penalty under its strengthened consumer protection powers introduced in April 2025.
Refund Process and Wider Industry Scrutiny
Affected customers will receive refunds automatically, with no action required. According to multiple reports, payments will be returned to the original card used for booking, or issued by cheque where this is not possible. The average refund is expected to be around £9, though individual amounts will vary depending on lesson packages purchased.
The AA acknowledged the issue, stating that while the booking fee had been disclosed before purchase, it should have been presented earlier in the booking journey. The company said it has since updated its website to make pricing clearer.
The case forms part of a broader CMA effort to address misleading online pricing. According to government research, 46% of online businesses were found to use hidden or dripped fees, costing consumers up to £3.5 billion annually.
Since gaining expanded powers, the CMA has launched investigations into multiple companies across different sectors, including retail and digital platforms. The action against the AA is described as a milestone in this wider enforcement campaign, signalling a stricter approach to ensuring transparency in advertised prices.
The regulator has also introduced guidance for businesses, including a checklist aimed at ensuring compliance with pricing rules. The focus remains on requiring that all unavoidable charges are clearly included in the headline price presented to consumers
