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 received a fine of £4.2 million from the Competition and Markets Authority (CMA) for their use of drip pricing strategies.
Drip pricing involves advertising a product or service at a low initial cost and then adding unavoidable fees later in the booking process. The CMA discovered that both schools failed to display the complete price upfront for their online bookings, omitting a mandatory £3 booking fee between April and December 2025.
New customers were only shown the full price at checkout after selecting lessons, times, and entering personal details. Returning customers saw the booking fee separately from the initial price, with it included in the total price at checkout on the subsequent page.
The refund amount for each consumer will vary based on the number of lesson packages purchased, with an average payout of approximately £9. Affected customers do not need to take any action to receive their refunds as the AA Driving School and BSM Driving School will contact each customer and issue automatic refunds.
The CMA initiated an investigation into the AA Driving School and BSM Driving School the previous year. The AA admitted to violating consumer law and settled the case early with the CMA, resulting in a 40% reduction in its financial penalty.
Sarah Cardell, Chief Executive of the CMA, emphasized the importance of transparency in pricing, stating that mandatory fees must be included in the initial price to ensure consumers are fully informed.
A spokesperson for AA driving schools acknowledged the oversight in displaying the £3 booking fee at the start of the online booking process and highlighted immediate changes made to rectify it. Despite the investigation’s outcome, the AA Driving School affirmed its commitment to consumer rights over its 120-year history.
In a separate study in 2023, the Department for Business and Trade found that nearly half of online businesses employ hidden or drip fees, leading consumers to spend an estimated extra £3.5 billion annually online.
Service fees, such as booking or processing charges, were identified as problematic, being mandatory and revealed late in the checkout process.
