The Competition and Markets Authority (CMA) has imposed significant penalties on two AA-owned driving schools for engaging in deceptive pricing practices that contravened consumer protection regulations. BSM Driving School and AA Driving School have been collectively fined £4.2 million and ordered to repay £760,000 to over 80,000 affected customers following an investigation into illegal “drip” pricing methodologies.
The regulatory breach centred on the imposition of a mandatory £3 booking fee that was withheld from customers until the checkout stage of their online transaction. Under the current consumer protection law, which came into force in April 2025, all compulsory fees must be disclosed at the initial price quotation stage rather than revealed progressively throughout the purchasing journey. This practice, commonly known as “drip” pricing, is a systematic approach to obscuring the true cost of goods and services from consumers at the point of decision-making.
The CMA’s investigation identified that the AA driving schools had added these mandatory booking charges between April and December of the previous year, revealing the full transaction cost only after customers had selected their preferred lesson times and entered personal information. This temporal separation between price discovery and commitment creation constitutes a material breach of consumer rights legislation.
Sarah Cardell, Chief Executive of the CMA, stated that clarity in pricing represents a fundamental consumer right, particularly for significant financial commitments such as driving instruction. She emphasised that mandatory fees must be incorporated into the advertised price from the outset, ensuring consumers possess complete cost information before making purchasing decisions.
The average refund per customer is anticipated to be approximately £9, with affected individuals expected to receive written notification regarding their eligibility for reimbursement. The AA has acknowledged the breach and committed to immediate remedial action, including enhanced prominence of the booking fee within the initial stages of its online booking interface.
This enforcement action forms part of a broader regulatory campaign addressing deceptive pricing practices across the digital economy. The CMA previously reported that over 100 businesses received regulatory correspondence regarding suspicious additional fees and sales tactics. Concurrently, investigations were launched into eight separate organisations suspected of engaging in deceptive pricing methodologies.
Government research conducted in 2023 demonstrated that approximately 46 per cent of online retailers employed some form of concealed fee structure, resulting in aggregate consumer losses estimated at £3.5 billion annually. This systemic problem has prompted intensified regulatory scrutiny and enforcement activity across consumer protection agencies.
The driving instruction sector has faced particular market pressures following the COVID-19 pandemic. Learner drivers currently experience extended waiting periods for practical driving tests, with typical delays extending to six months or longer. The National Audit Office identified a backlog of approximately 1.1 million tests in December, attributable to instructor shortages and cancelled assessments during lockdown periods. This capacity constraint has created conditions wherein consumers have faced elevated costs and reduced choice, potentially increasing their vulnerability to exploitative pricing practices.
The AA’s settlement with the CMA represents acknowledgement of the regulatory violation and demonstrates willingness to implement corrective measures. However, the case underscores the necessity for continuous regulatory vigilance within digital commerce environments where pricing opacity remains prevalent.
