More than 80,000 learner drivers were not shown the total price of lessons upfront when booking, as is required by law
Thousands of learner drivers will be issued with refunds after AA driving schools were found guilty of drip pricing.
More than 80,000 learner drivers were not shown the total price upfront when booking lessons, which is required by law, at two schools owned by AA.
Both BSM and The AA driving schools introduced a mandatory £3 booking fee later in the process, which is a banned practice known as drip pricing.
The Competition and Markets Authority (CMA) has ordered refunds and fined the AA £4.2m. Both the refunds and fine combined will be almost £5m.
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.
“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.”
Rocio Concha, Which? director of policy and advocacy, called it “unacceptable” for firms to hit customers with extra fees that are not made sufficiently clear.
She said: “Which? has repeatedly exposed and campaigned against dodgy business practices like drip pricing.
“This strong and swift action by the regulator, including refunds for customers, is a warning to businesses that illegal practices won’t be tolerated.”
A spokesperson for AA driving schools has claimed that the £3 booking fee was made clear to customers prior to their purchase.
But they added: “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.”