Two leading driving schools have been instructed to reimburse £760,000 to over 80,000 students. The AA Driving School and BSM Driving School, both under the ownership of AA, have also faced a fine of £4.2 million from the Competition and Markets Authority (CMA) due to their use of drip pricing strategies.
Drip pricing involves promoting a product or service at a low initial cost and later adding mandatory fees that cannot be avoided during the booking process. The CMA discovered that both schools failed to display the total price upfront for their online bookings, excluding a mandatory £3 booking fee from April to December 2025.
New customers were only presented with the full price at checkout after selecting lessons, choosing times, and entering personal details. Returning customers saw the booking fee separately from the initial price, with it being included in the total price on the subsequent checkout page.
The refund amount for individual consumers will vary based on the number of lesson packages purchased, with an average payout of approximately £9. Affected customers will receive automatic refunds as the AA Driving School or BSM Driving School will contact each customer directly.
The CMA initiated an investigation into AA Driving School and BSM Driving School last year. The AA admitted to violating consumer laws and settled the case early with the CMA, resulting in a 40% reduction of its financial penalty.
Sarah Cardell, the Chief Executive of the CMA, emphasized the importance of transparent pricing, stating that mandatory fees must be integrated into the initial price to ensure consumers are aware of the total cost from the beginning. She highlighted the impact of hidden fees on individuals’ financial decisions, particularly in significant expenses like learning to drive.
A spokesperson for AA driving schools acknowledged the oversight in displaying the £3 booking fee at the start of the online booking process and confirmed immediate changes to enhance its visibility on the website. The school expressed disappointment with the investigation’s outcome but emphasized their cooperation with the CMA and commitment to consumer rights over their long history.
In 2023, the Department for Business and Trade reported that nearly half of online businesses (46%) utilize hidden or drip fees, leading consumers to spend an estimated additional £3.5 billion online annually. Service fees, such as booking or processing charges, were flagged as problematic due to being mandatory and revealed late in the checkout process.