Today, the Competition and Markets Authority (“CMA”) ordered the AA, which owns both AA Driving School and BSM Driving School, to refund more than 80,000 learner drivers over £760,000, and pay a fine of £4.2 million, bringing the total bill to nearly £5 million. The offence? A mandatory £3 booking fee that was not included in the headline price shown to customers at the start of their online journey.
This is the first financial penalty the CMA has imposed under new direct enforcement powers granted to it in the Digital Markets, Competition and Consumers Act 2024 (“DMCCA”). It will not be the last.
What happened?
Between April and December 2025, customers booking driving lessons on the AA and BSM websites were shown prices that, initially, did not include a mandatory booking fee. For new customers, the full price was only revealed at checkout after lessons had been selected, times chosen, and personal details entered. For returning customers, the booking fee was shown separately and only folded into the total on the following page.
After an investigation, the CMA determined that this practice amounted to what is known as ‘drip pricing’. Consumer law requires businesses to show all unavoidable charges in the headline price from the outset, so that consumers can make informed choices. Adding extra charges later in the checkout process can mislead consumers into selecting a product or service based on an artificially low price.
The AA cooperated with the CMA’s investigation, admitted to breaking the law, and agreed to settle the case early, receiving a 40% reduction to its financial penalty. This brought the fine down from £7 million to £4.2 million. Affected customers will receive automatic refunds without needing to take any action, with the average payout being £9.
Why this matters: the CMA’s new enforcement teeth
This case marks a step change in UK consumer protection enforcement. Until April 2025, the CMA had to go through the courts to take action against businesses that breached consumer law. That all changed with the introduction of the DMCCA. The CMA now has direct civil enforcement powers, meaning it can investigate, determine whether a business has broken the law, and impose penalties, all without a court order.
The fines are significant. The CMA can impose administrative penalties of up to 10% of a business’s global annual turnover, or £300,000, whichever is greater. It can also direct businesses to compensate consumers, cease infringing conduct, and implement compliance measures. If a business fails to comply with the CMA’s directions, it faces further fines of up to 5% of global turnover, with additional daily penalties for continued non-compliance. Individual directors and senior managers can be held personally liable for up to £300,000 for being an “accessory” to consumer law breaches.
As CMA Chief Executive Sarah Cardell put it in the press release announcing the decision: “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”.
Subscription contracts: more regulation is coming
Businesses that rely on subscription models should take particular note. The DMCCA introduces a comprehensive new regime for consumer subscription contracts, requiring clearer pre-contract information, regular reminder notices before auto-renewals, and mandatory cooling-off periods. The government confirmed on 2 April 2026 that this regime is now expected to come into force in Spring 2027.
The delay gives businesses time to prepare, but the AA decision makes clear that the CMA is not waiting around. Since April 2025, the CMA has launched investigations into 14 businesses, most recently in relation to fake and misleading reviews. It has also sent advisory letters to around 100 firms across 14 sectors, including gyms, parking and airport parking, cinemas, live event tickets, and food and drink delivery companies.
The direction of travel is unmistakable: pricing transparency and fair treatment of consumers are top enforcement priorities, and the appetite for action is growing.
What should your business do now?
The practical implications of this decision are clear. If your business sells to consumers (online or otherwise), you should be taking the following steps now.
- Audit your checkout architecture. Review every step of the online customer journey. Are all mandatory fees, charges, and taxes included in the headline price from the outset?
- Consider all regulatory requirements. The CMA is not only targeting drip pricing. It is investigating misleading time-limited offers, false discount claims, and default opt-ins to additional services. Pressure-selling tactics and misleading online design are within the CMA’s sights.
- Review your subscription practices. If you operate a subscription model, start preparing for the DMCCA’s new subscription regime now.
Don’t wait for the CMA to come knocking
The AA’s £5 million bill started with a £3 booking fee. The CMA has made clear that it will use its new powers decisively, and that no mandatory charge is too small to attract scrutiny. With enforcement action accelerating and new regulation on the horizon, now is the time for businesses to get their house in order.