AA Driving School Fined and Ordered to Repay Customers Due to Drip Pricing Practices

The AA motoring group has been fined £4.2 million and ordered to repay £760,000 to customers after the Competition and Markets Authority found its driving schools, AA Driving School and BSM Driving School, guilty of drip pricing. The regulator identified that more than 80,000 learner drivers were not provided with the total price upfront when booking lessons online, as required by law. Instead, a mandatory £3 fee was added later in the booking process.

Sarah Cardell, Chief Executive of the CMA, stated that if a fee is mandatory, it must be included in the price from the very beginning of the transaction. This requirement aims to ensure that consumers are fully aware of their total payment obligations prior to completing their purchases.

This ruling marks the first financial penalty imposed by the CMA under its new enforcement powers concerning breaches of consumer law. The proportion of the total fine will be distributed to individuals affected, with the average refund expected to be around £9, depending on the number of lesson packages purchased.

A spokesperson for the AA driving schools acknowledged that while the £3 booking fee was transparently stated during the purchase process, it should have been prominently displayed at the outset of the online booking journey. Following the outcome of this investigation, the company has made immediate adjustments to its website to rectify the issue.

All relevant customers will receive automatic refunds, either back to the original payment card or via cheque if that is not feasible. The CMA has stated that customers do not need to take further action regarding these refunds.

Recent findings by the Department for Business and Trade revealed that almost half of online businesses utilise drip pricing, contributing to a total of £3.5 billion in additional consumer spending annually.

As concerns over driving test backlogs and the rising costs associated with learning to drive persist, the implications of such pricing practices may further deter young individuals from obtaining driving licenses.