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 been penalized £4.2 million by the Competition and Markets Authority (CMA) for employing drip pricing strategies.

Drip pricing involves advertising a low initial price for a service and then introducing mandatory fees later during the booking process. The CMA investigation revealed that both schools did not disclose the complete price upfront for online bookings, omitting 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, times, and entering personal details. Returning customers saw the booking fee separately from the initial price and included in the total price on the following checkout page.

Individual refunds for affected consumers will vary based on the number of lesson packages purchased, with the average refund amounting to approximately £9. Customers impacted by this issue do not need to take any action to receive their refund, as the AA Driving School or BSM Driving School will initiate automatic refunds by contacting each customer directly.

The CMA initiated an investigation into the AA Driving School and BSM Driving School last year. The AA admitted to violating consumer law and settled the case with the CMA, resulting in a 40% reduction in the financial penalty imposed.

Sarah Cardell, Chief Executive of the CMA, emphasized the importance of transparency in pricing, stating that mandatory fees should be included in the initial price to provide consumers with clear information. She highlighted the impact of hidden fees on consumer decisions, particularly in significant expenses like driving lessons.

A spokesperson for AA driving schools acknowledged the need to display the £3 booking fee prominently at the beginning of the online booking process. Immediate changes were made to the website to address this issue, and all relevant customers are being refunded. The spokesperson reiterated the company’s commitment to consumer protection over its long history.

In a separate report in 2023, the Department for Business and Trade found that nearly half of online businesses use hidden or drip pricing, leading consumers to spend billions extra annually. Service fees, such as booking or processing charges, were identified as problematic, being mandatory and disclosed late in the checkout process.