As I suspect you know, it is against the law for a person to offer any sexual services in exchange for money. As an example, it would be against the law to offer to have sexual intercourse with another person for a fee.
I suppose the best answer here would be for your friend's sister to not engage in illegal activities. However, assuming that isn't going to happen, there are certainly things she can do to protect herself. In most cases where an arrest has occurred, there will be a conversation between the undercover officer and the escort about money, this would typically include a discussion of specific sex acts and specific amounts of money.
There is a common belief that police officers cannot lie, especially as to their identity. Meaning, the must admit that they are cops if asked. This is false, cops can lie about this issue. However, there are some things cops cannot do, they cannot engage in any sex acts, they cannot fondle the other person and they cannot disrobe. These are certainly things that should be taken into consideration.
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