The AA has become the first company to feel the sting of the Competition and Markets Authority’s new consumer enforcement powers, landing a £4.2 million fine and being ordered to return £760,000 to more than 80,000 learner drivers who were stung by so-called drip pricing.
The watchdog ruled that the motoring group’s two tuition arms, AA Driving School and BSM Driving School, failed to display the full cost of lessons upfront when customers booked online, a legal requirement under the regime that came into force last year. Instead, a compulsory £3 booking fee was quietly bolted on further down the purchase journey, leaving learners to discover the true price only once they were deep into the checkout process.
Sarah Cardell, the CMA’s chief executive, was unambiguous in her verdict. “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,” she said.
The enforcement action is the first of its kind and sends an unmistakable signal to British business that the regulator is prepared to wield its sharpened teeth. Since April 2025, the CMA has been able to investigate and penalise breaches of consumer protection law directly, without recourse to the courts, a shift that had been widely flagged as a potential game-changer for how SMEs and large corporates alike present pricing online.
Affected customers will not need to lift a finger. The two driving schools will write to those who qualify and refund them automatically, either to the card originally used or, failing that, by cheque. Individual payouts will depend on how many lesson packages each learner purchased, with the average repayment coming in at roughly £9.
A spokesperson for AA Driving School sought to draw a line under the episode. “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,” they said. “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. Whilst we are disappointed with the outcome of the investigation, we have fully co-operated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years.”
Drip pricing, the practice of advertising a headline figure and then layering on mandatory extras at the point of sale, has long been a bugbear of consumer champions. A 2023 study by the Department for Business and Trade found that nearly half of online traders were using the tactic, stripping an estimated £3.5 billion a year out of consumers’ pockets. For small and medium-sized businesses watching the AA case unfold, the lesson is straightforward: what might once have passed as a marketing nicety is now a regulatory tripwire.
The ruling also arrives at a delicate moment for the AA itself. Advisers were reportedly appointed late last year to examine either a sale or a stock market flotation of the group, five years on from its £219 million take-private deal struck by Warburg Pincus and TowerBrook Capital Partners. A public rebuke from the CMA is hardly the shop-window polish its owners will have been hoping for as they court potential buyers.
The timing is equally awkward for Britain’s hard-pressed learner drivers. Department for Transport figures show that the share of 17 to 20-year-olds in England holding a full driving licence has tumbled from 37 per cent in 2018 to 29 per cent in 2024, with the cost of tuition cited as the single biggest deterrent to getting behind the wheel. Learners who do press ahead now face an average waiting time of 22 weeks to sit their practical test, compared with roughly five weeks in February 2020, before the pandemic upended the system.
For an industry already struggling with affordability and access, being publicly pulled up for opaque pricing is an unwelcome spotlight. For the wider business community, the message from Canary Wharf is rather blunter: the CMA has found its cheque book, and it is no longer afraid to use it.
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AA ordered to refund 80,000 learner drivers in landmark ‘drip pricing’ ruling