AA and BSM ordered to refund learner drivers for hidden fees

The Competition and Markets Authority (CMA) has ruled that the AA and BSM driving schools must issue refunds to over 80,000 learners who were charged undisclosed fees during online bookings. The watchdog found that customers were not shown the full cost of lessons upfront, leading to confusion and financial surprise. As part of the settlement, Automobile Association Developments has been fined £4.2m for violating consumer laws.

Refund details and customer impact

Each affected learner will receive an average of £9, with the total refunds amounting to £760,000. The schools were criticized for hiding a mandatory £3 booking fee until the final checkout stage, after customers had already selected their lessons, set their preferred times, and provided personal information. This tactic, termed “drip-pricing,” is considered deceptive and contravenes consumer protection rules.

“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,” stated a spokesperson for AA and BSM driving schools. “Having listened to the regulator, we made immediate changes to our website to make the fee more prominent and are now refunding all relevant customers.”

Investigation findings

The CMA’s probe, initiated in November, revealed that between April and December last year, customers were initially presented with prices excluding the mandatory booking fee. This fee was only revealed later, potentially influencing decisions based on lower initial costs. Sarah Cardell, CMA chief executive, highlighted that mandatory fees must be visible from the beginning to ensure transparency.

“At a time when people are watching every pound, dripped fees can tip the balance,” Cardell added. “Consumers should always know what they’re paying before committing to a service.”

The decision follows an investigation into eight businesses, with AA and BSM being among those found to have misled customers through unclear pricing practices. The schools have since updated their websites to address the issue and provide clearer information to future users.