AA and BSM Driving Schools Face Major Penalty for Hidden Fees
The Competition and Markets Authority (CMA) has issued a landmark enforcement action against two prominent driving schools owned by the AA, mandating refunds totalling £760,000 to more than 80,000 learner drivers. This decision marks the first financial penalty imposed by the CMA under its new enforcement powers for breaches of consumer law.
Details of the Drip-Pricing Scandal
An investigation by the CMA, launched in November 2025, uncovered that AA Driving School and BSM Driving School engaged in an illegal pricing tactic known as drip-pricing. The schools advertised upfront prices for driving lessons that omitted a mandatory £3 booking fee, which was only revealed later in the online booking process. This practice misled customers by presenting a lower initial cost, with the full amount becoming apparent only after they had selected lessons, chosen times, and entered personal details.
Sarah Cardell, chief executive of the CMA, emphasised the importance of transparency in pricing. "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," she stated. "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."
Refunds and Penalties Imposed
The CMA has ordered the driving schools to refund affected customers, with individual payouts varying based on the number of lesson packages purchased. On average, each customer will receive approximately £9. In addition to the £760,000 in refunds, the schools must pay a substantial fine of £4.2 million, bringing the total financial impact to nearly £5 million.
Affected customers do not need to take any action to claim their refunds. AA Driving School or BSM Driving School will contact them directly, and the money will be automatically refunded to the card used for payment. If this is not possible, a cheque will be issued instead.
Response from the Driving Schools
A spokesperson for AA driving schools acknowledged the issue, stating, "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." The spokesperson added that the schools are now refunding all relevant customers and have fully cooperated with the CMA throughout the investigation.
Broader Context of Drip-Pricing in the UK
This case highlights a wider problem in online commerce. According to a 2023 report by the Department for Business and Trade, nearly half of online businesses in the UK use drip-pricing tactics, costing consumers up to £3.5 billion annually. The CMA's action against AA and BSM serves as a warning to other companies that such practices will not be tolerated under the new enforcement regime.
Key points for affected learners:
- Refunds apply to customers who booked lessons between April and December 2025.
- The average refund is around £9 per person.
- No action is required; schools will contact customers directly.
- Refunds will be processed automatically to the original payment method or via cheque.
This ruling underscores the CMA's commitment to protecting consumer rights and ensuring fair pricing practices in critical sectors like driving education.
