Two leading driving schools have been instructed to reimburse £760,000 to over 80,000 students. 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 utilizing drip pricing strategies.
Drip pricing involves advertising a low initial price for a product or service and then introducing mandatory fees later in the booking process. The CMA discovered that both schools failed to disclose the complete price upfront for their online bookings, omitting a compulsory £3 booking fee, during the period from April to December 2025.
For first-time customers, the total price was only revealed at the checkout stage, 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 refund of around £9. Affected customers will receive their refunds automatically without needing to take any action, as both AA Driving School and 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 law and settled the case promptly with the CMA, resulting in a 40% reduction in the 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 price from the beginning. She highlighted that drip pricing can impact consumer decisions, especially 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 mentioned immediate website changes to address this issue. The school expressed disappointment with the investigation’s outcome but emphasized its cooperation with the CMA and its commitment to consumer rights over its long history.
In a separate study in 2023, the Department for Business and Trade found that nearly half of online businesses use hidden or drip fees, leading consumers to spend billions extra annually online. Service fees, such as booking or processing charges, were identified as problematic due to their mandatory nature and late disclosure during the checkout process.