The owner of the aa and bsm driving schools must pay refunds to more than 80,000 learners after failing to disclose the total price for lessons upfront during booking online, following an investigation by the competition watchdog.
Affected customers will get a share of £760,000, making the average payout around £9, the competition and markets authority (cma) said.
Automobile association developments has also been fined £4.2m for breaking consumer law by using a practice known as "drip pricing".
A spokesperson for aa and bsm driving schools said it was "disappointed with the outcome of the investigation" but "cooperated fully" throughout.
They 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."
The cma's investigation found that people booking lessons online between april and december last year were initially shown prices that did not include a mandatory booking fee.
It was only shown to new customers at the checkout stage, after they had gone through selecting lessons, choosing times and entering their personal details.
For returning customers, it was shown separately from the initial price and only included in the total at checkout, the watchdog said.
The practice is known as "drip pricing" which is illegal and can mislead customers into choosing a service or product for a low price, only for it to be increased later.
The cma said the aa had admitted to breaking the law, and agreed to settle the case early. it received a 40% reduction on the penalty.
Cma chief executive sarah cardell, 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."
She added: "at a time when people are watching every pound, dripped fees can tip the balance."
Customers will receive a full refund of booking fees they paid. they do not need to do anything to get their refund – the aa driving school or bsm will write to individuals.
Matt crole-rees, motoring expert at confused.com, said there was a "concerning" lack of transparency about driving lessons pricing.
He said while the £9 average payout "might seem low, it still reflects a wider issue and could help drive better standards across the industry".