AA and BSM ordered to refund learner drivers for hidden fees
AA and BSM ordered to refund learner drivers for hidden fees
Following an investigation by the competition watchdog, the owner of AA and BSM driving schools has been required to issue refunds to thousands of learners. The issue stemmed from the failure to disclose the full cost of lessons at the time of online registration, leading to unexpected charges. The Competition and Markets Authority (CMA) revealed that Automobile Association Developments has been fined £4.2 million for violating consumer law.
Refunds and Financial Penalties
Over 80,000 customers of AA Driving School and BSM will receive a total of £760,000 in compensation, with an average payout of approximately £9. A representative from AA driving schools expressed disappointment with the investigation’s findings but emphasized full cooperation during the process. They stated: “Although the £3 booking fee was communicated to customers beforehand, it should have been highlighted from the beginning of the online booking process. We promptly updated our website to ensure the fee was more visible and are now refunding affected individuals.”
“If a fee is mandatory, it must be included in the price from the very start—before checkout—so consumers are never surprised by additional costs,” said Sarah Cardell, chief executive of the CMA. She added: “At a time when people are mindful of their spending, hidden fees can sway decisions and lead to unfair outcomes.”
Investigation Details
The CMA’s inquiry uncovered that between April and December last year, customers booking lessons online were initially shown prices excluding a mandatory booking fee. This fee was only revealed at the checkout stage, after users had selected lessons, set times, and provided personal details. The tactic, known as drip-pricing, is deemed illegal as it may trick customers into choosing a service based on a lower initial price, only to face higher costs later.
The watchdog launched its investigation into eight businesses, including AA Driving School and BSM Driving School, to address this practice. The findings highlight the importance of transparency in pricing to prevent consumer confusion and ensure fair treatment.
