Customers to get refunds as AA driving schools fined £4.2m in first clampdown on illegal online pricing

Customers of BSM Driving School and The AA Driving School - both owned by the AA - are to receive refunds following an investigation by the competition regulator.

The Competition and Markets Authority (CMA) has ordered more than 80,000 customers to be refunded and fined the AA £4.2m.

The regulator found the learner drivers booking lessons were subject to an illegal practice known as drip pricing and were not shown the full price upfront, as the law requires.

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A mandatory £3 booking fee was not included in this upfront price, the CMA said.

A spokesperson for AA driving schools 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."

The total cost of the CMA decision is nearly £5m: more than £760,000 in customer refunds and the £4.2m fine.

This sum would be higher, but the Automobile Association Developments Limited (the AA) admitted to breaking the law, and agreed to settle early and so received a 40% reduction in the penalty.

It comes as the cost of a driving lesson has risen sharply in recent years. An average one-hour driving lesson in the UK is now £36 to £40, up from £31 to 35 in 2023, according to research carried out by the Driver and Vehicle Standards Agency (DVSA) about working as an approved driving instructor.

What's wrong with drip pricing?

Drip fees are widespread, according to statistics from the Department for Business and Trade (DBT), which showed 46% of businesses use hidden charges.

As a result, shoppers are estimated to spend up to £3.5bn each year.

Service fees, like booking or processing charges, were said to be particularly problematic, as they're typically mandatory and revealed late in the checkout process, DBT research found.

It's the first time the watchdog has used new consumer law powers to clamp down on illegal online pricing practices.

"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," said CMA chief executive Sarah Cardell

"At a time when people are watching every pound, dripped fees can tip the balance. And when it comes to something as important - and costly - as learning to drive, people deserve clarity".

What to do if you're a customer

The average payout will be around £9, according to the CMA, though the amount will vary depending on lesson packages purchased.

Affected customers do not need to take any action; the driving schools will write to each customer with the money automatically refunded onto the card they used to pay.

The CMA's investigation found that between April and December 2025, the AA and SM initially showed learner driver prices that did not include the mandatory booking fee.

New customers were only shown the full price at checkout, having selected lessons, chosen times and entered personal details.

For returning customers, the booking fee was separate from the initial price and included only in the total checkout price.

"Whilst we are disappointed with the outcome of the investigation, we have fully cooperated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years," the AA spokesperson said.

(c) Sky News 2026: Customers to get refunds as AA driving schools fined £4.2m in first clampdown on illegal online pricing