CMA issues multi-million 'drip pricing' fine in enforcement first

The Competition and Markets Authority (CMA) said it was imposing a £4.2 million consumer law fine against AA Driving School and BSM Driving School after the two companies admitted breaches of new ‘drip pricing’ consumer protection rules.

The fine was issued after two recent CMA investigations revealed a mandatory £3 booking fee was not included in the total upfront price shown to 80,000 learner drivers when booking lessons online. The illegal practice, commonly known as ‘drip pricing’, can mislead consumers into selecting a service or product for its low price, only for this to be increased later at the checkout.

Under pre-existing consumer law, drip pricing could be investigated as a misleading action or omission, however, since 6 April 2025, the practice is outright illegal under the Digital Markets, Competition and Consumers Act 2024 (DMCCA). The DMCCA contains updated provisions that prohibit a wide range of “unfair commercial practices” (UCPs), including drip pricing, pressure selling, and fake reviews.

The two parallel investigations, launched by the CMA in November 2025, found that consumers booking driving lessons on the AA and BSM websites between April and December 2025 were initially shown prices that did not include the mandatory booking fee.

The CMA ordered the Automobile Association Developments Limited (the AA), which owns both driving schools, to pay a fine of £4.2 million for breaking consumer law and to issue over £760,000 in refunds to affected customers. The fine and refunds will cost the AA almost £5 million.

The CMA said the company admitted to breaking the law and agreed to settle the case early, receiving a 40% reduction to its financial penalty.

This is the agency’s first monetary fine imposed for a substantive breach of consumer protection rules using its new direct enforcement consumer law powers under the DMCCA. Earlier this year the CMA also imposed a fine of nearly £500,000 million for a procedural breach of the new rules, where a trader failed to comply with mandatory information requests.

Angelique Bret, a competition and consumer law expert at Pinsent Masons, said the outcome of the investigations was significant: “The £4.2 million fine represents a 40% settlement discount, otherwise the full penalty would have been approximately £7 million,” she said. “The settlement also explains the speed of the CMA’s infringement determination, which comes just five months after the investigation was announced publicly.”

Tadeusz Gielas, a competition and consumer law expert at Pinsent Masons, added: “This is a landmark development, marking the first time the CMA imposed a monetary fine under the DMCCA for a substantive infringement of the UK’s recently expanded consumer protection rules. It highlights that the CMA is serious about enforcement and that businesses must treat consumer law compliance as seriously as compliance with competition rules.”

In a statement, Sarah Cardell, Chief Executive of the CMA, said: “If a fee is mandatory, the law is clear: it must be included in the price from the very start – not added at checkout – so consumers always know what they need to pay.”

Cardell added that customers deserved “clarity” on pricing as increases in the cost of living place greater pressure on consumers, particularly learner drivers and motorists.

The CMA said that affected customers would be contacted directly by the AA Driving School or BSM Driving School and, where possible, automatically refunded payment for their lessons.

A spokesperson for AA driving schools said: “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.”

“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.”

“Whilst we are disappointed with the outcome of the investigation, we have fully cooperated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years.” 

These latest penalties form part of broader action being taken by the authority to clamp down on unfair trading and pricing practices in the UK. In 2023, the Department for Business and Trade found that almost half of online businesses (46%) used hidden or dripped fees (62-page / 452KB PDF), resulting in consumer spending up to £3.5 billion extra online each year.

Having concluded its two investigations into the BSM and the AA driving schools, the CMA is continuing six other consumer protection investigations it launched last November, involving fitness firm Gold’s Gym; homeware retailers Wayfair, Appliances Direct and Marks Electrical; and secondary ticketing sites StubHub and viagogo. These ongoing investigations likewise examine whether the traders’ respective online pricing and sales practices may have infringed consumer protection rules that prohibit UCPs including drip pricing and pressure selling.

Last month the CMA also launched a further six investigations: five of these are looking at companies’ online reviews or star ratings and a separate investigation focused on the use of early termination fees.

The CMA has also issued warning letters to a further 100 firms warning them about their business practices. The 14 sectors targeted include areas it has previously scrutinised, such as package holidays, online vouchers, fashion and live event ticketing.

The CMA’s final infringement decision concerning the AA and BSM investigations is expected to be published soon. The CMA is also expected to publish an update on the Gold’s Gym investigation this summer.

All CMA consumer law investigations launched since November 2025 have been brought under the UCP provisions of the DMCCA. In spring 2027, new subscription contracts rules under the DMCCA are expected to come into force and will further expand the CMA’s enforcement reach. Subscription contract traps are a growing focus for consumer protection enforcers across Europe, with forthcoming EU proposals for a Digital Fairness Act (DFA) also aiming to tackle subscription traps as well as drip pricing and other practices.

In a further move that may herald substantial future change for UK’s consumer law regime, the Law Commission of England and Wales has launched a new project that will consider the potential introduction of a consumer class actions regime, following an earlier UK government announcement.  The UK’s separate competition law collective proceedings regime is undergoing review after its first 10 years of operation.