It’s been a bad week for the AA; it has admitted to overcharging thousands of learners for lessons in a practice called ‘drip pricing’. This occurs when the total cost of a service or product is not stated upfront, with charges added later on in the online ordering process.

In this case, the AA’s two driving schools – the AA Driving School and BSM – did not include mandatory fees in the upfront cost shown to learners between April and December 2025. This caught the attention of the government’s Competition and Markets Authority (CMA). Its role is to enforce consumer law, which mandates that all non-optional costs must be visible from the start.

The investigation revealed that over 80,000 learners were not given the total price of booking lessons online right from the beginning. Instead, the mandatory fee of £3 was added at checkout.

Sarah Cardell, Chief Executive of the CMA, states: “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.”

Big fine

The CMA’s investigation has led to the authority issuing a whopping £4.2 million fine to the AA, plus an order to refund affected customers to the tune of £760,000. All in, the AA will have to dish out just under £5 million for breaking the law.

But the fine could have been far worse – up to 40% higher – if the company had not admitted to breaking the law. Without its early admission, it could have faced a fine of £7 million.

While the AA says it’s “disappointed with the outcome of the investigation”, a spokesperson stated: “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.”

“At a time when people are watching every pound, dripped fees can tip the balance. And when it comes to something as important – and costly – as learning to drive, people deserve clarity.”

Sarah Cardell, Chief Executive, CMA

Bigger picture

So what does this mean for you if you booked within the impacted time period? The CMA estimates customers will receive a £9 refund on average.

That might not sound like much – but official figures from the Department for Business and Trade show that nearly half of online businesses use hidden or dripped fees. It adds up to UK customers being charged up to £3.5 billion each year for the illegal online ‘practice’.

As for getting your money back, the good news is that you don’t need to do anything. The AA will issue a refund automatically to the card you paid for your lessons with. If that isn’t possible, you’ll get a cheque instead.

Just the start?

You shouldn’t expect the AA’s big fine to be the last we hear on the issue of drip pricing. This is actually the first time such a financial penalty has been issued by the CMA since it received its new enforcement powers; previously, it would have to pursue companies breaking consumer law through the courts. Now, the CMA can decide for itself.

These new powers were introduced in 2025 and saw the CMA send out letters to 100 businesses about its concerns over their use of extra fees and aggressive online sales tactics. At the moment, big hitters such as Autotrader and Just Eat are now under the authority’s microscope. Watch this space.

Know Your Code

 

Double your chances of theory test success with Theory Test Pro. Sign up for free here.

Main image by Google Gemini.