AA and BSM ordered to refund learner drivers for hidden fees

The owner of the AA and BSM driving schools must pay refunds to more than 80,000 learners after failing to disclose the total price for lessons upfront when booking online, following an investigation by the competition watchdog.

Affected customers will share £760,000, making the average payout around £9, the Competition and Markets Authority (CMA) said.

Automobile Association Developments has also been fined £4.2m for breaking consumer law.

A spokesperson for AA and BSM driving schools said it was "disappointed with the outcome of the investigation" but "cooperated fully" throughout.

They 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."

Customers do not need to do anything to get their refund – the AA Driving School or BSM Driving School will write to individuals.

The CMA's investigation found that people booking lessons online between April and December last year were initially shown prices that did not include a mandatory booking fee.

It was only shown at the checkout stage, after new customers had gone through selecting lessons, choosing times and entering their personal details.

The practice is known as "drip-pricing" which is illegal and can mislead customers into choosing a service or product for a low price, only for it to be increased later.

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."

She added: "At a time when people are watching every pound, dripped fees can tip the balance."

Business Secretary Peter Kyle said consumers "should never be caught out by unclear pricing".

He said: "I welcome the CMA's tough action today to enforce the law and make sure businesses play fair."

In November, the CMA launched an investigation into eight businesses including AA Driving School and BSM Driving School, under the new Digital Markets, Competition and Consumers Act 2024.

This gave the watchdog new powers to decide if consumer laws had been broken rather than having to go through the courts. The CMA's action against the AA is the the first penalty it has imposed under the new enforcement powers.