I get times when my wife or kids should be able to get a location that the app displays "Location not available" or many times get locations that are not completely accurate. Right now it shows my son is at school so that's good. 😉 Not sure what you're experiencing but I would never use Find My Friends to accuse someone of anything or get them in trouble because the app didn't give accurate information.
There was a story recently in the news where a home in Atlanta keeps popping up on Find my iPhone for people with lost or stolen phones and no one can determine why. They believe that it probably has something to do with cell phone tower triangulation but this couple continues to get people showing up on their door demanding their phone and some arrive with police officers. http://bgr.com/2016/01/22/find-iphone-stolen-lost/
If you need to know exactly where someone is, best bet would be to hire a private investigator.