The AA and its subsidiary BSM Driving School have been fined £4.2 million and ordered to refund more than 80,000 learner drivers for failing to display the full price of lessons at the time of booking, a practice known as 'drip pricing'. The Competition and Markets Authority (CMA) said the total repayments amount to more than £760,000, with individual refunds averaging about £9.
The CMA investigation found that the AA-owned businesses did not include the full price upfront when learners booked lessons online, as required under UK consumer law. Instead, a mandatory fee was introduced later in the booking process. 'If a fee is mandatory, the law is clear: it must be included in the price from the very start – not added at checkout,' said Sarah Cardell, chief executive of the CMA.
The regulator noted that the AA admitted to breaking the law and cooperated with the investigation, leading to a 40% reduction in the potential financial penalty. This is the first time the CMA has imposed a financial penalty for a breach of consumer law since gaining new powers to decide on enforcement without court proceedings.
An AA spokesperson 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. We made immediate changes to our website and are now refunding all relevant customers.'
The CMA continues to investigate other companies, including ticket sellers StubHub and Viagogo, gym chain Gold's Gym, and retailers Wayfair, Appliances Direct, and Marks Electrical, over similar pricing concerns. In 2023, a government review found that nearly half of online businesses used hidden or dripped fees, costing consumers an estimated £3.5 billion extra annually.
