AA and BSM ordered to refund learner drivers for hidden fees

AA and BSM ordered to refund learner drivers for hidden fees

The management of AA and BSM driving schools has been mandated to issue refunds to numerous learners following a probe by the competition watchdog. The Competition and Markets Authority (CMA) revealed that the schools were penalized for violating consumer laws by concealing the full cost of lessons during online bookings.

AA Driving School, operated by Automobile Association Developments, has faced a £4.2m penalty. Over 80,000 customers from both institutions will receive a combined £760,000 in refunds, averaging approximately £9 per individual. A representative from the schools stated they were “disappointed with the investigation’s outcome” but “cooperated fully” during the process.

“While the £3 booking fee was communicated to customers before their purchase, the schools acknowledged it should have been more visible during the initial booking process. Having listened to the regulator, we made immediate changes to our website to highlight the £3 booking fee more prominently. We are now refunding all relevant customers,” the spokesperson said.

The CMA’s inquiry uncovered that customers booking lessons online between April and December last year were initially shown prices without the mandatory booking fee. This fee was only displayed at the checkout stage, after users had selected lesson types, scheduled times, and input personal details.

The practice, termed “drip-pricing,” is considered unlawful as it can trick consumers into choosing a service based on a lower initial price, only to see additional charges later. Sarah Cardell, CMA chief executive, emphasized: “When a fee is required, the law requires it to be included in the price from the outset—not added at checkout—ensuring consumers understand their total cost.” She noted that such practices can significantly impact individuals who are mindful of their expenses.

In November, the watchdog initiated an investigation into eight businesses, including AA and BSM Driving Schools, to examine their pricing strategies. This led to the current resolution, highlighting the importance of transparency in consumer transactions.