Hidden Fees, Heavy Fines: The CMA's Consumer Protection Crackdown Gathers Pace

On April 15, 2026, the CMA announced its enforcement action against the AA Driving School and BSM Driving School. The CMA ordered the businesses, both owned by Automobile Association Developments Limited ("AADA"), to refund affected customers more than £760,000 and pay a £4.2 million fine for illegal online pricing tactics.

This marks the first time the CMA has utilized its direct enforcement powers under the DMCC to impose financial penalties and mandate consumer refunds for breaches of consumer law.

The Offense: What Constituted "Drip Pricing"?

After launching an investigation in November 2025, the CMA found that, between April and December 2025, the AA and BSM driving schools had engaged in an illegal practice known as "drip pricing." When consumers booked driving lessons online, they were presented with a headline price that omitted a mandatory £3 booking fee. For new customers, this unavoidable fee was revealed only at the final checkout stage, after personal details and times had been entered. Returning customers similarly saw the fee separated from the initial price and added only on the final page.

Under UK consumer law, businesses are strictly required to display all unavoidable, mandatory charges in the upfront headline price. While the DMCC introduces more specific requirements regarding the pricing information that must be provided by businesses, certain aspects of drip pricing have long been prosecuted as unlawful by the CMA under the existing Consumer Protection from Unfair Trading Regulations 2008, which prohibit the provision of misleading information. Practices such as failing to include mandatory charges upfront, introducing unavoidable fees at checkout, and presenting misleading headline prices that exclude compulsory costs have all been the subject of prior CMA cases, making this an area where the CMA has been willing to move beyond education efforts to hard enforcement at the outset.

Consequences of the Breach

Under the terms of the settlement agreement, AADA has agreed to pay a fine of £4.2 million and pay automatic refunds to more than 80,000 customers. The initial fine levied was £7 million, but this was discounted by 40% as a result of AADA admitting to breaking the law, engaging constructively, and agreeing to settle early via a streamlined administrative procedure. The customer refunds, which will be paid automatically to affected customers, are expected to total more than £760,000.

Wider Regulatory Context

The CMA's enforcement against the AADA is not an isolated incident; it signals an important shift in the United Kingdom's consumer protection landscape, driven by the introduction of the CMA's administrative enforcement powers under the DMCC.

Prior to this point, the CMA had to rely on protracted court proceedings to enforce consumer law, which resulted in very limited enforcement occurring to date. The DMCC arms the CMA with direct administrative powers to impose fines of up to 10% of a company's global turnover for consumer law breaches, in addition to individual fines of up to £300,000 on directors and senior managers directly involved in the breaches.

The CMA has explicitly identified deceptive online practices as a priority enforcement area, citing UK government research indicating that nearly half (46%) of online businesses employ hidden or dripped fees, which it calculates to cost UK consumers between £595 million and £3.5 billion annually. While the economic evidence is mixed, the CMA considers service and booking fees to be "particularly harmful" as they are nearly always mandatory and typically added late in the checkout process.

Since its strengthened powers came into effect in April 2025, the CMA has launched a series of formal investigations into businesses for a range of consumer law infringements, including drip pricing, use of misleading time-limited offers, automatic opting in for optional charges, and fake and misleading reviews. These businesses have included furniture and appliances suppliers, software providers, funeral directors, used car exchanges, pasta suppliers, secondhand ticket operators, and online food delivery providers.