AA and BSM Required to Issue Refunds for Opaque Lesson Pricing

The Competition and Markets Authority (CMA) has mandated refunds for over 80,000 learners who enrolled with AA and BSM driving schools, citing their failure to present the full cost of lessons during online bookings. The investigation revealed that customers were not informed of a mandatory £3 booking fee until the final checkout step, prompting accusations of misleading practices. As a result, Automobile Association Developments was levied a £4.2m penalty for violating consumer laws.

Financial Impact and Customer Refunds

A total of £760,000 will be distributed among affected customers, averaging approximately £9 per person. A representative for AA driving schools stated they were “disappointed with the outcome” of the probe but “cooperated fully” during the process. The spokesperson emphasized that the £3 fee had been previously disclosed to customers, though it was only highlighted at the end of the booking process.

“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.”

What the CMA Found

The watchdog’s investigation uncovered that between April and December of last year, users were initially shown prices excluding the mandatory fee. The fee was only revealed at the checkout stage, after customers had selected lessons, set times, and provided personal details. This technique, referred to as “drip-pricing,” is deemed unlawful and can deceive consumers into accepting a lower initial cost, only to face additional charges later.

Sarah Cardell’s Statement

CMA chief executive Sarah Cardell highlighted that mandatory fees must be visible from the outset, not added at the last minute. She remarked: “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. At a time when people are watching every pound, dripped fees can tip the balance.”

The CMA’s inquiry extended to eight businesses, including AA Driving School and BSM Driving School, uncovering similar pricing practices across the sector. This action underscores the authority’s commitment to ensuring transparency in consumer transactions.