Two leading driving schools have been instructed to reimburse £760,000 to over 80,000 students. Both AA Driving School and BSM Driving School, subsidiaries of AA, have been penalized £4.2 million by the Competition and Markets Authority (CMA) for employing drip pricing strategies.
Drip pricing involves promoting a product or service at a low initial cost and subsequently adding unavoidable compulsory charges during the booking process. The CMA discovered that both schools did not display the complete price upfront for their online bookings, excluding a mandatory £3 booking fee, from April to December 2025.
New customers were only shown the full price at the checkout stage, after selecting lessons, choosing times, and entering personal information. Returning customers had the booking fee displayed separately from the initial price and it was only included in the total price on the subsequent checkout page.
The refund amount for each consumer will vary based on the number of lesson packages purchased, with an average refund of approximately £9. Affected customers will automatically receive 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 breaching consumer laws and settled the case early with the CMA, resulting in a 40% reduction in the financial penalty imposed on them.
Sarah Cardell, the Chief Executive of the CMA, emphasized the importance of including mandatory fees in the upfront price to provide transparency to consumers, especially in significant expenses like learning to drive. The CMA vowed to intervene and rectify any violations of consumer protection laws.
A spokesperson for AA driving schools acknowledged the oversight in not prominently displaying the £3 booking fee at the beginning of the online booking process. They highlighted immediate website changes to enhance the visibility of the booking fee and emphasized their commitment to consumer rights over their long history.
In a separate report in 2023, the Department for Business and Trade found that nearly half of online businesses utilize hidden fees, leading consumers to spend billions extra annually. Service fees, such as booking or processing charges, were identified as problematic due to their mandatory nature and late disclosure in the checkout process.