The AA has become the first company to feel the pain of the Competition and Markets Authority’s new powers to enforce consumer rights, being fined £4.2m and ordered to refund £760,000 to more than 80,000 learner drivers who were affected by so-called drip pricing.
The regulator ruled that the car group’s two teaching arms, AA Driving School and BSM Driving School, had failed to show customers the full cost of lessons in advance when booking online, a legal requirement under rules that came into force last year. Instead, a mandatory £3 booking fee was quietly charged later in the purchase process, meaning learners only found out the true price once they were deep into the checkout process.
Sarah Cardell, the chief executive of the CMA, was clear in her judgment. “If a fee is mandatory, the law is clear: it must be included in the price from the start and not added at checkout so that consumers always know what they have to pay,” she said.
The enforcement action is the first of its kind and sends an unmistakable signal to the UK economy that the regulator is ready to use its sharpened teeth. Since April 2025, the CMA has been able to directly investigate and prosecute breaches of consumer protection laws without having to go to the courts, a change that has been widely cited as potentially game-changing for the way SMEs and large businesses present their prices online.
Affected customers don’t have to lift a finger. The two driving schools will notify those who qualify and automatically refund them, either to the card they originally used or, if that is not possible, by check. Individual payouts depend on how many lesson packs each learner has purchased, with the average payback being around £9.
A spokesman for the AA Driving School tried to draw a line under the incident. “Although the £3 booking fee was made clear to customers prior to purchase, we recognize that it should also have been displayed at the start of the online booking process,” they said. “After listening to the regulator, we immediately made changes to our website to make the £3 booking fee more prominent. We are now refunding all relevant customers. While we are disappointed with the outcome of the investigation, we have co-operated fully with the CMA throughout and would like to emphasize that protecting consumer rights has been central to our business for more than 120 years.”
Drip pricing, the practice of advertising a headline and then adding mandatory extras to it at the point of sale, has long been a bugbear among consumer advocates. A 2023 study by the Department for Business and Trade found that almost half of online retailers used this tactic, leaving consumers out of an estimated £3.5 billion a year. For small and medium-sized businesses watching the AA case unfold, the lesson is clear: What was once considered a marketing ploy is now a regulatory tripwire.
The ruling also comes at a sensitive time for the AA itself. Advisers were reportedly appointed late last year to explore either a sale or an IPO of the group, five years after the £219m take-private deal completed by Warburg Pincus and TowerBrook Capital Partners. A public rebuke from the CMA is hardly the gloss the owners were hoping for as they woo potential buyers.
The timing is equally difficult for Britain’s hard-pressed learner drivers. Figures from the Department for Transport show the proportion of 17 to 20-year-olds in England who have a full driving license has fallen from 37 per cent in 2018 to 29 per cent in 2024, with tuition fees cited as the biggest deterrent to getting behind the wheel. Learners who make it through now face an average wait of 22 weeks for the practical test, compared to around five weeks in February 2020, before the pandemic upended the system.
For an industry already struggling with affordability and access, being publicly called out for opaque pricing is an unwelcome spotlight. For the wider business community, the message from Canary Wharf is rather blunt: the CMA has found its checkbook and is no longer afraid to use it.
