The Competition and Markets Authority concluded that more than 80,000 learner drivers booking lessons through AA Driving School and BSM Driving School were not shown the full price upfront, with a mandatory £3 fee added later in the process.

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.”

It marks the first financial penalty imposed by the CMA under its new consumer enforcement powers. Refunds will vary depending on the number of lessons purchased, with the average payment around £9.

An AA driving schools spokesperson 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 co-operated with the CMA throughout and would emphasise that protecting consumer rights has been central to our business for more than 120 years.”

Customers will be contacted directly and refunded automatically, with cheques issued where necessary.

A 2023 study by the Department for Business and Trade found nearly half of online businesses used such fees, costing consumers up to £3.5 billion annually.