Two major driving schools owned by the AA have been ordered to refund more than 80,000 customers and pay a £4.2m fine by the UK’s competition watchdog for engaging in an illegal pricing tactic.
The Competition and Markets Authority (CMA) found that AA Driving School and BSM Driving School omitted a mandatory £3 booking fee from their advertised upfront prices.
This practice, known as drip-pricing, meant that learner drivers were not shown the full cost of their lessons initially, with the fee only appearing later in the booking process.
Individual refunds will vary depending on the number of lesson packages purchased, averaging around £9 per customer, and totalling more than £760,000. The combined refunds and penalty will amount to nearly £5m. This marks the first financial penalty issued by the CMA for a breach of consumer law since it gained new enforcement powers.
Sarah Cardell, the CMA chief executive, 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 before 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 cooperated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years.”
The decision comes after the Department for Business and Trade reported in 2023 that nearly half of online businesses used dripped fees, costing consumers up to £3.5bn annually.
Who is eligible for a refund?
The CMA launched its investigation in November 2025 and found that people booking lessons between April and December that year were initially shown prices that did not include the mandatory booking fee.
New customers were instead only shown this at the booking stage, after they had already selected lessons, chosen times, and entered personal details.
This practice is known as “drip-pricing”, which is illegal and can mislead customers into believing the product or service they were buying was a lower price than they would later be charged.
The average payout will be around £9, the CMA has said, adding that affected customers do not need to take any action. AA Driving School or BSM Driving School will contact them directly, confirming that the money will be automatically refunded to the card used for payment. If this is not possible, a cheque will be issued.
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