Hidden fees, real consequences: CMA issues its first infringement decision under the UK’s new consumer protection regime

The UK's Competition and Markets Authority (CMA) has issued its first ever financial penalty under its new direct consumer enforcement powers. The decision signals the start of a new and more aggressive era of consumer protection enforcement in the UK, with significant implications for any business that sells products or services to consumers online.

At a glance

• The CMA has fined Automobile Association Developments Limited (the entity operating the AA and BSM driving schools) £4.2 million for unlawful drip pricing practices on its online lesson booking platforms, and ordered it to refund approximately £760,000 to affected customers.
• This is the first infringement decision to be issued under the CMA's new "direct" consumer enforcement powers, which allow the CMA to fine businesses and order redress itself directly, without having to bring enforcement proceedings before the courts.
• The decision illustrates both the CMA's intent and its ability to move swiftly in enforcing its new consumer protection regime. With drip pricing firmly established as an enforcement priority, businesses that rely on multi-stage pricing, add-on charges or complex checkout flows should treat a review of their practices as an immediate priority.

The new UK consumer enforcement landscape

The Digital Markets, Competition and Consumers Act 2024 (the DMCCA) transformed the UK consumer protection enforcement landscape by allowing the CMA to:

• enforce consumer protection legislation directly, without the need for a court order as under the previous regime;
• issue high fines for consumer law infringements (up to 10% of group worldwide annual turnover); and
• issue "enhanced consumer measures", which may include requirements to provide retrospective compensation to consumers, or to permit early contract termination.

From April 2025 to April 2026,¹ the CMA has launched consumer law investigations into 14 businesses and settled with two, across a range of sectors, including in relation to drip pricing and fake or misleading reviews. The CMA has also issued 157 “advisory and warning letters”.

The UK government² has recently asked the Law Commission to assess whether the consumer laws could be strengthened by the introduction of a consumer class action regime.

The decision: what the CMA found

On 15 April 2026, the CMA issued a Final Infringement Notice to Automobile Association Developments Limited, trading as AA and BSM. 

Between April and December 2025, customers were shown prices for driving lessons that did not include a mandatory £3 booking fee. For new customers, the fee appeared only at checkout — after lesson times had been selected and personal details entered. For returning customers, the fee was displayed separately from the initial price and was incorporated into the total only on a subsequent page. The CMA believes that at least 90,000 consumers were affected by these practices.

This practice, known as drip pricing, involves adding unavoidable fees later in the purchasing process rather than including them in the headline price advertised to consumers. Section 230 of the DMCCA expressly prohibits drip pricing, by requiring any "invitation to purchase" to include the total price of the product. The total price must:

• include any fees, taxes, charges or other payments that the consumer will necessarily incur if the consumer purchases the product; and
• be provided clearly, in a timely manner, and in a way that the consumer is likely to see it.

The CMA found that there were no relevant limitations on the AA and BSM websites that prevented complete pricing information from being provided at the package selection or booking summary stages. Providing a fully inclusive total price would not have required any more space than the price as presented.

The CMA imposed a fine of £7 million, but reduced this by 40% to £4.2 million because the AA agreed to settle the case at an early stage under a streamlined administrative procedure, which required it to admit to breaking the law and to engage constructively with the CMA throughout the investigation. 

In addition to the fine, the CMA ordered the AA to take enhanced consumer measures in the form of a redress scheme, requiring it to refund a total of £760,000 in fees to all affected individuals. 

Key takeaways 

• The financial exposure under the new regime is substantial.

  The introduction under the DMCCA of turnover-based penalties (capped at 10% of group worldwide annual turnover) creates significant financial exposure, particularly for large multinational businesses. That exposure is further compounded by the CMA's power to order enhanced consumer measures: any fine may therefore be accompanied by a separate obligation to fund consumer redress. In this case, the redress order of approximately £760,000 was relatively modest. It is not difficult, however, to conceive of scenarios — particularly for businesses with large or repeat-purchasing customer bases — where the volume of affected transactions, and therefore the quantum of required refunds, could be considerably higher.

• Online pricing is a defined enforcement priority.

  The CMA's 2026–2027 Annual Plan (see our previous blog post here), together with recent blog posts³ and public statements by the CMA's Chief Executive⁴, make it unambiguously clear that online pricing practices are a key target area for enforcement activity. 

• The CMA can and will move quickly.

  Although assisted by the fact that the AA agreed to settle at an early stage, the CMA brought its investigation to a close in less than five months. This stands in sharp contrast to competition law investigations, which routinely extend over several years as a result of extensive information-gathering exercises and protracted legal and economic arguments over issues such as market definition, competitive effects and the characterisation of the conduct in question. 

• Early engagement and settlement can meaningfully shape the outcome.

  As this case demonstrates, a settlement discount of up to 40% is available where a business engages constructively with the CMA, makes clear and unequivocal admissions and agrees to an expedited process for concluding the investigation. Early legal advice — and a considered decision as to whether proactive engagement is the appropriate strategy — can therefore have a material bearing on both the financial and reputational consequences of any CMA investigation.

• Businesses should take proactive action now.

  Businesses should:

  • conduct a thorough review of end-to-end purchasing journeys, mapping every stage at which pricing information is presented to a consumer; and 
  • ensure that any mandatory fee (such as a booking fee, service charge, or processing fee) is included in the very first headline price shown to the customer, rather than introduced at a later stage of the checkout process.

_{1 See CMA's blog post of 17 April 2026 here.
2 See the relevant entry on the Law Commission's website here.
3 See CMA's press release of 18 November 2025 here, and CMA's blog post of 17 April 2026 here.
4 See Sarah Cardell's LinkedIn post here.}

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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