The UK's competition regulator has told the owner of two major nationwide driving schools to refund learner drivers after failing to disclose a mandatory booking fee it applied when students booked lessons online.
The Competition and Markets Authority (CMA) launched an investigation into how Automobile Association Developments used "drip pricing" on websites for the AA and BSM driving schools between April and December 2025.
The £3 booking fee was only added at the checkout stage, after customers had selected the dates and times of their lessons and entered their personal details. The CMA said that for returning customers, the additional charge was shown separately from the initial price and only included in the total at checkout.
Officially known as drip pricing, the practice is illegal in the UK as it misleads customers into making choices without knowing the full price until later in the buying journey.
Why were the AA and BSM fined for drip pricing?
The AA and BSM driving schools are now refunding £760,000 and parent company Automobile Association Developments has also been fined £4.2 million for breaking consumer law with its drip pricing strategy.
However, while these sums are not insignificant, the £760,000 is to be shared between 80,000 affected customers. The amount repaid to individual consumers will vary depending on how many lesson packages they purchased, but the average payout will total around £9.
A spokesperson for the companies said: "Although the £3 booking fee was made clear to customers prior to their purchase, we acknowledge it should have also been displayed at the start of the online booking journey. Having listened to the regulator, we made immediate changes to our website to make the £3 booking fee more prominent. We are now refunding all relevant customers."
However, the CMA said the AA had admitted to breaking the law and agreed to settle the case early, which saw its penalty reduced by 40 percent.
CMA chief executive Sarah Cardell, said: "If a fee is mandatory, the law is clear: it must be included in the price from the very start – not added at checkout – so consumers always know what they need to pay. At a time when people are watching every pound, dripped fees can tip the balance."
First penalty under the Digital Markets Act
The CMA's action against the AA is the first financial penalty it has imposed for a breach of consumer law using its new enforcement powers under the Digital Markets, Competition and Consumers Act 2024.
The act was introduced in 2024 to give the CMA new powers to identify and prosecute illegal practices without going through court. It covers transparency in pricing among other things and in April 2025, under its new powers, the CMA embarked on a major review of how hundreds of businesses comply with transparency rules.
According to reports, the CMA wrote to 100 businesses highlighting concerns, and in November launched investigations into eight: StubHub, Viagogo, AA Driving School, BSM Driving School, Gold's Gym, Wayfair, Appliances Direct and Marks Electrical. The investigations focused on mandatory additional charges, time-limited sales and automatic opt-ins.
As of April 2026, further investigations into Autotrader, Feefo, Dignity, Just Eat, and Pasta Evangelists are ongoing and findings yet to be published.
What is drip pricing?
As outlined, drip pricing involves showing a consumer only part of the charge they will pay at the start of their buying journey, with further mandatory charges added as they progress the purchase.
The CMA says that under consumer law, businesses must show all unavoidable charges in the headline price from the outset, enabling people to make informed choices. Adding extra charges later in the process – a practice known as drip pricing – can result in consumers being misled into choosing a service or product for its low price, only for this to be upped at the checkout.
Despite the practice being anti-consumer – and now illegal – drip pricing has been widely used in the past. In 2023, the UK Department for Business and Trade found that 46 percent of online businesses applied at least one hidden or dripped fee, with consumers estimated to spend an additional £595 million to £3.5 billion online each year as a result. The department's figures include mandatory service fees that are revealed late in the checkout process but do not account for the impact of search or consumers selecting multiple optional fees.
The CMA said that when its strengthened consumer powers came into force in April 2025, it committed to "prioritizing enforcement against this kind of practice, as well as other unlawful online pricing practices". It added that the settlement with the AA "marks a significant milestone in that work".