Thousands of UK learner drivers to receive refunds in drip-pricing crackdown
Two AA-owned driving schools have been ordered to refund more than 80,000 customers and pay a £4.2 million fine by the UK competition watchdog for engaging in “drip pricing”.
The Competition and Markets Authority (CMA) found AA Driving School and BSM Driving School unlawfully subtracted a mandatory booking fee of £3 from their advertised cash prices.
This practice, known as drop pricing, meant that learner drivers were not initially shown the full cost.
Individual refunds will vary depending on the number of course packages purchased and will total more than £760,000, with an average of £9 per customer. The repayments and penalty will total approximately £5 million.
This is the CMA’s first financial penalty for breaches of consumer law since gaining new enforcement powers.
CMA chief executive Sarah Cardell said: “If a charge is mandatory, the law is clear: it must be built into the price from the start – not added at checkout – so consumers always know what they have to pay.
“At a time when people are paying attention to every pound, falling wages could tip the balance. “When it comes to something as important and costly as learning to drive, people deserve clarity.
“With our new powers, it will never pay to break the law or treat consumers unfairly. Where the rules are ignored, we will step in to make things right.”
A spokesman for AA driving schools said: “Although the £3 booking fee is made clear to customers prior to purchase, we recognize this should also be displayed at the start of the online booking journey.
“After listening to the regulator, we immediately made changes to our website to make the £3 booking fee more prominent.
“We are now issuing refunds to all customers concerned. Although we are disappointed with the outcome of the investigation, we have cooperated fully with the CMA throughout and would like to emphasize that the protection of consumer rights has been at the heart of our business for over 120 years.”
The CMA said affected customers need not take any action.
AA Driving School or BSM Driving School will write a letter stating that the money will be automatically refunded to the card they used to pay for the lesson.
If this is not possible, a check will be sent to them.
In 2023, the Department for Business and Trade found that almost half of online businesses used discounted fees, resulting in consumers spending up to £3.5bn a year.
