AA Driving School fined £4.2 million over hidden booking fees

More than 80,000 learner drivers are due refunds after the AA was fined £4.2 million for failing to show the full cost of lessons upfront, a ruling that lifts the total bill to almost £5 million.

The Competition and Markets Authority said AA Driving School and BSM Driving School, both owned by Automobile Association Developments Limited, added a mandatory £3 booking fee later in the online purchase process instead of displaying it at the start. The regulator described the practice as drip pricing, where a headline price looks cheaper than the amount customers actually pay.

The AA must refund more than £760,000 in total, with individual payouts expected to average around £9 depending on how many lesson packages each customer bought. The fine and refunds together mean the company faces an overall cost of almost £5 million.

The penalty matters beyond one driving-school chain. The CMA said it was the first financial penalty it has imposed using its new direct consumer enforcement powers, which took effect on 6 April 2025 under the Digital Markets, Competition and Consumers Act 2024. Those powers give the regulator a sharper tool for tackling online pricing that leaves out compulsory charges until the final stages of checkout.

The case also sits inside a wider enforcement push. In November 2025, the CMA opened investigations into eight businesses, including AA Driving School and BSM Driving School, and wrote to 100 businesses across 14 sectors about additional fees and sales tactics. It also published new guidance on price transparency, signalling that hidden charges in online booking flows are now a live enforcement priority rather than a technical compliance issue.

For families paying for lessons, the consumer impact is immediate. A £3 booking fee may look small on its own, but spread across multiple lessons and package purchases it can increase the cost of learning to drive at a moment when young people and parents are already facing high bills for fuel, insurance and test fees. The average refund of about £9 suggests many customers paid the hidden charge more than once.

The broader cost to households has already drawn attention. A 2023 government study cited in reporting found that as many as 46% of online businesses were using some form of hidden fees, costing consumers an extra £3.5 billion a year. The AA case now stands as a warning to online sellers and a reminder to customers to check whether the first price shown includes every mandatory charge before booking.