AA Driving School fined £4.2m over hidden booking fees: 80,000 learners to be refunded

Automobile Association Developments Limited, the company behind AA Driving School and BSM Driving School, has been fined £4.2m after the CMA found that the two schools withheld a mandatory booking fee from the advertised price of online lessons between April and December 2025. The practice, known as drip pricing, is illegal under UK consumer law.

More than 80,000 learner drivers will be refunded, with the total repayment pot coming to over £760,000. The CMA expects the average payout to be around £9, reflecting a £3 booking fee applied per transaction. The AA has agreed to refund affected customers automatically, either to the original payment card or by cheque where that is not possible.

What the CMA found

Under UK consumer law, any mandatory fee has to be built into the price shown at the start of a transaction. The CMA found that new customers were shown the total only at the checkout stage, while returning customers saw the £3 fee displayed separately right up until the final checkout page. In both cases, learners comparing lesson prices were never shown the true upfront cost.

“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.”

The AA’s original penalty was £7m. It was reduced to £4.2m after the company admitted the breach, agreed to settle early and cooperated with the investigation, the maximum 40 per cent discount available under the CMA’s settlement framework. The AA has also agreed not to appeal and must report its refund progress to the regulator over the next year.

“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.”

A first under new CMA powers

The fine is notable beyond its size. It is the first financial penalty the CMA has issued for a breach of consumer law under the strengthened regime that came into force in April 2025, which allows the regulator to act directly rather than having to seek a court order. Previously, punishing companies for consumer-law breaches could take years.

The AA investigation was one of eight opened by the CMA in November 2025 as part of a wider probe into online pricing and sales tactics. Ongoing cases cover the ticket resale sites StubHub and Viagogo, the US gym chain Gold’s Gym, and the retailers Wayfair, Appliances Direct and Marks Electrical, each examined for variants of hidden pricing or pressure selling. The broader review followed a CMA sweep of more than 400 businesses across 19 sectors.

The AA is one of the best-known consumer brands in Britain, making its driving schools a high-profile first target under the new regime. With eight other CMA investigations into online pricing practices still ongoing, further penalties are likely to follow.

What affected learners should expect

If you booked lessons directly with AA Driving School or BSM Driving School between April and December 2025, you do not need to do anything. The AA has confirmed it will write to each affected customer, and money will be returned automatically to the original payment card used at the time of booking. Where a card refund is not possible, for example if the card has since expired or been cancelled, the AA will send a cheque instead.

The refund you receive will depend on how many lesson packages you bought, because the £3 booking fee was charged per transaction rather than per lesson. The CMA puts the average payout at around £9, with the full £760,000 pot distributed across more than 80,000 learners. The AA must report its progress to the regulator over the next year, so if your refund has not arrived within that window it is worth contacting the AA directly.

Sources: CMA press release, 15 April 2026; CMA case page; LBC News.