Tennessee Private Investigator Licensing Practice Exam

What is the practice of charging more than a standard hourly rate if the results justify it called?

1. Results Billing

2. Hourly Adjustment

3. Fee Increase

4. Service Charge

The correct answer is: Results Billing

The practice of charging more than a standard hourly rate when the results justify it is known as Results Billing. This approach recognizes the value of the outcomes achieved rather than simply the time spent on a case. It aligns the interests of the client and the investigator, as the fee adjusts based on the effectiveness and success of the services provided. This can motivate the investigator to achieve better results, knowing that their compensation will reflect their success. The other options do not accurately describe this practice: 'Hourly Adjustment' simply suggests a change in the hourly rate without implying a performance-based rationale. 'Fee Increase' lacks specificity and does not necessarily relate to results achieved. 'Service Charge' usually refers to a nominal fee added for specific services rendered, not necessarily tied to the effectiveness of those services. Therefore, Results Billing is the most precise term for this practice.