The Competition and Markets Authority (CMA) has ordered AA Driving School and BSM Driving School to refund over 80,000 customers and pay a £4.2 million fine for illegal drip pricing practices — marking a significant milestone in the regulator’s use of its enhanced consumer protection powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA).

The CMA’s investigation found that learner drivers booking lessons on the AA and BSM websites between April and December 2025 were not shown the full price upfront. A mandatory £3 booking fee was added only at checkout — after customers had selected their lessons, chosen times, and entered personal details. This practice, known as “drip pricing”, is illegal under new rules brought in by the DMCCA, which requires businesses to display the total price (i.e., inclusive of all mandatory fees, costs, taxes, etc.) from the outset.

As a result of the investigation, the AA — which owns both driving schools — must refund more than £760,000 to affected customers and pay a fine of £4.2 million, bringing the total cost to nearly £5 million. The company admitted to breaking the law and agreed to settle the case early with the CMA, receiving a 40% reduction to the original £7 million penalty.

This is the first financial penalty the CMA has imposed for a breach of consumer law using its new direct enforcement powers under the DMCCA. Since April 2025, the CMA has been able to determine whether consumer law has been broken without going through the courts, and can impose fines of up to 10% of a company’s global annual turnover.

The case is part of a broader enforcement drive focused on online pricing practices (see our update here). Government research published in 2023 found that 46% of online businesses used at least one dripped fee, with consumers estimated to spend up to £3.5 billion extra online each year as a result. Service fees — such as booking or processing charges — were found to be particularly problematic, being both mandatory and typically revealed only late in the checkout process.

This enforcement action sends a clear signal: the CMA is prepared to use its enhanced powers robustly and at pace. Having given businesses time to get their houses in order, it is now acting decisively against those who fall foul of consumer protection rules.

Since April 2025, the CMA has launched investigations into 14 businesses covering pricing practices (see here), fake reviews (see here), and other unlawful online practices. The AA settlement — coming just one year into the new regime — demonstrates that this is not a regulator content to wait and see.

For businesses operating online, particularly those relying on complex pricing structures or handling consumer-facing reviews and ratings, the practical takeaway is clear: practices must be urgently reviewed to ensure compliance with the CMA’s published guidance.

If you would like to discuss any of the above issues with our experienced consumer team, please contact Claire Livingstone.

More information about the DMCCA can be found on our tracker page here.