Learner drivers to get booking fees refunded over crackdown on drip-pricing
Two AA-owned driving schools have been ordered by the UK competition watchdog to refund more than 80,000 customers and have been fined £4.2 million over drip-pricing.
The Competition and Markets Authority (CMA) said the AA Driving School and BSM Driving School did not include a mandatory £3 booking fee in upfront prices.
This is an illegal practice known as drip-pricing.
The amount repaid to individuals will vary depending on how many lesson packages they bought, with the average being about £9.
This will total more than £760,000.
The refunds and fine combined will almost be £5 million.
This is the first financial penalty the CMA has imposed for breach of consumer law since it was handed new enforcement powers.
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.
“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.
“With our new powers, it will never pay to break the law or treat consumers unfairly. Where the rules are ignored, we’ll step in to put things right.”
A spokesperson for AA driving schools 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. Whilst we are disappointed with the outcome of the investigation, we have fully co-operated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years.”
Affected customers do not need to take any action, the CMA said.
The AA Driving School or BSM Driving School will write to them stating that the money will be automatically refunded onto the card they used to pay for their lessons.
If that is not possible, they will be sent a cheque.
In 2023, the Department for Business and Trade found nearly half of online businesses used dripped fees, with consumers spending up to £3.5 billion per year as a result.
Published: by Radio NewsHub