@Kimpenelope
Spoiler!
From what I've read so far, they don't handle it really. In the novel the sister just becomes sus of Freya and FL because she's not sure of who to believe. Later the dad and brother of the FL come to an important event and the ML asks her sister to watch the brother and sister closely for anything (he doesn't trust the brother and she doesn't know who to trust). Regretfully the brother of the FL notices and does something nasty to confirm everyones sus.