Sexual exploitation leads to significant losses for survivors – physically, psychologically and financially. If crime victims’ rights are intended to address the specific harms resulting from the crime and provide protection, it seems that financial security fits within the penumbra of rights that survivors of sexual exploitation deserve.1 The following summarizes the nature of losses for these crimes, the costs associated with recovery, the laws providing compensation and the financial wellness tools necessary for survivors to thrive.
I. Losses Requiring Financial Compensation
a. Child Sex Abuse
Beyond the obvious physical harms caused by child sex abuse (CSE), survivors of this crime are predicted to experience post-traumatic stress disorder, depression, and substance misuse.2 CSE survivors can also expect to lose earning potential as a result of this debilitating abuse.3
b. Child Sexual Abuse Material
Those whose sexual abuse is electronically recorded and distributed to other offenders through the internet endure exacerbated harms beyond those caused by the hands-on abuse.4 Research shows that victims of child sexual abuse material (CSAM) suffer distinct and long-term psychological, social-emotional, and physical harms characterized by lifelong trauma as a result of the unstoppable viewing of their sexual abuse.5 “[C]hild pornography victims are subject to a greater long-term risk of depression, guilt, poor self-esteem, feelings of inferiority, interpersonal problems, delinquency, substance abuse, suicidal thoughts, and post-traumatic stress disorder than other child sexual assault victims. As one victim stated, ‘[u]nlike other forms of exploitations, this one is never ending. Every day people are trading and sharing videos of me as a little girl being raped in the most sadistic ways.’”6
c. Sex Trafficking
Victims of forced or coerced commercial sex or sex-trafficking (ST), have similar outcomes. “Studies show that women who have been trafficked for sex have higher levels of fear, are more isolated, and have greater trauma and mental health needs than other victims of crime. Trafficked women and girls also encounter high rates of physical and sexual violence, memory loss, sexually transmitted diseases, and traumatic brain injuries.”7 Notably, federal law requires that restitution for victims of sex trafficking include not just the cost of treating the harms but also recovery of the gross income or value to the defendant of the victim’s services.8 In other words, the defendant is to pay the victim back the money they earned through the victim’s engagement in commercial sex.
II. Federal Law Requires Compensation for Lifetime Costs
a. Criminal Restitution
Under federal law, compensation for victims of CSE, CSAM and ST in the form of criminal restitution is mandatory.9 Importantly, survivors of these crimes are entitled to the “full amount” of their losses which is defined as “any costs incurred, or that are reasonably projected to be incurred in the future, by the victim, as a proximate result of the offenses involving the victim . . . including—
(A) medical services relating to physical, psychiatric, or psychological care;
(B) physical and occupational therapy or rehabilitation;
(C) necessary transportation, temporary housing, and child care expenses;
(D) lost income;
(E) reasonable attorneys’ fees, as well as other costs incurred; and
(F) any other relevant losses incurred by the victim.”10
Based on the severe nature of these crimes, the conditions they cause, and the long-term specialized treatment required for survivors to attempt to be made whole again, restitution orders can and should be quite significant.11
b. Civil Remedies
Compensatory damages under federal civil lawsuits also exist for survivors of CSE, CSAM and ST and can include broader non-economic losses than criminal restitution. CSE victims can sue offenders in federal civil court to seek actual damages or $150,000 in liquidated damages, plus attorney’s fees, litigation costs, and potential punitive damages. 12 Human trafficking victims can similarly file federal civil lawsuits seeking monetary compensation for physical and emotional harm, potential punitive damages, and attorney fees against entities that financially benefited from their exploitation, such as hotels. 13 Much like recovered restitution awards, civil damages can amount to meaningful compensation for crime victims. 14
III. Victims’ Compensation Funds as a Source of Recovery
a. State Victims’ Compensation Fund Programs
State-administered victims’ compensation fund programs can be sources of recovery for survivors of sexual exploitation.15 Regrettably, many state programs have eligibility requirements that functionally exclude survivors of these crimes, such as disqualification for a criminal record or a requirement that they work with law enforcement to report their exploitation.16 State victims’ compensation funds are encouraged to increase eligibility and access for crimes of sexual exploitation, especially when funds are underused.17
b. Federal Victims’ Compensation Funds
Federally-administered victims’ compensation funds are having a moment. Congress mandated, and the Department of Justice recently launched, the Defined Monetary Assistance Victims Reserve (DMAVR) to provide compensation to survivors of CSAM through a one-time award upon a showing of victim status in a prosecuted federal CSAM case.18
Another example of a federally-administered fund creating economic opportunity for survivors was the Backpage Remission Fund.19 Innovatively, The U.S. Department of Justice redirected the funds recovered from the asset seizure in the criminal prosecution of commercial sex advertising website, Backpage, to a victims’ compensation fund. The fund was made available to victims who had been advertised on websites implicated in the criminal matter on the premise that the illegally operated website facilitated the sex trafficking of those advertised.20 Specifically, victims whose sex trafficking was facilitated through advertisements posted on Backpage.com or CityXGuide.com between Jan. 1, 2004 and April 6, 2018 who incurred financial losses related to their trafficking were eligible for remission.21 At the time of this publication, the third-party administrator of the Backpage Remission Fund is reviewing applications and will distribute the over $200 million in criminal profits to eligible and approved applicants.
Despite selling the bodies of their victims, sometimes for a lot of money and over long periods of time, most human trafficking defendants end up indigent and without assets. They therefore never meet their restitution obligations to those they hurt. The creation of the Backpage Remission Fund was a brilliant government response ensuring that many survivors will actually see some compensation for their harms. Similarly, the DMAVR has already proven to provide important financial support to CSAM victims who have not been sufficiently compensated through criminal or civil recovery.
IV. Protection and Prosperity
We must acknowledge that most victims of sexual exploitation are never compensated for the devastating harms resulting from these types of crime. But for the survivors who do receive compensation through criminal restitution, civil damages, or a victims’ compensation fund, that is just the first step to financial wellness. Fulfilling this crime victim’s right requires access to a full complement of financial products and services.
a. Credit Repair
Victims of ST, in particular, often have significant credit repair needs.22 The victim experience for sex trafficking survivors includes not only physical and psychological abuse, but there is almost always concurrent or residual economic abuse.23 Traffickers coerce victims to take on debts through co-signing loans or leases, they file fraudulent tax returns or benefits applications, or they use a victim’s identity during and after the trafficking period for their own financial benefit.24 This often results in a delinquent and damaged credit history for the victim, which can have a debilitating impact on financial wellness.25
Since 2022, there has been federal relief from this harmful form of financial abuse.26 The Debt Bondage Repair Act (DBRA) prohibited credit reporting agencies from including adverse information that resulted from trafficking on a trafficking survivor’s consumer reports.27 Pro se, or with a pro bono lawyer, ST victims can seek blockages of harmful credit entries with the credit reporting agencies.28 While this regulated process does not erase debt, it provides relief within days in the form of a credit report and score that better reflects the consumer’s credit worthiness on the road to financial wellness.
b. Building Good Credit After Bad
After receiving compensation and repairing credit history, the next step is rebuilding and accessing safe banking. Originally launched in 2019 by the United Nations’ Finance Against Slavery & Trafficking (FAST) Initiative, the Survivor Inclusion Initiative (SII) has helped thousands of human trafficking survivors across the United States, Canada, and the United Kingdom gain access to safe banking and financial services.29 In the United States, the SII has enabled survivors to become bank customers from large cities to small towns, without barriers. As a financial inclusion program, SII’s signature feature is accommodation for survivors who may not otherwise be eligible for banking because of obstacles such as the ability to safely disclose an address, a threshold credit score, funds for a starting balance, or documentary forms of identification.30 The program has enabled survivors who were financially exploited by their traffickers to build good credit after a history of delinquency caused through no fault of their own.31 It has connected survivors to mortgage loans, lines of credit, and transmission services to send recovered lost wages to victims’ families.32 Banks turned their products and services into a defense against re-exploitation and a promise of prosperity for survivors.33
c. Tax Advice and Financial Planning
Victims’ compensation is rooted in various federal and state law and regulation and what qualifies as “physical injury” for tax exempt status creates complications for survivors of sexual exploitation, especially because the IRS holds that nonconsensual touching alone is not a “physical injury.”34 And tax issues considered at settlement can extend long after, such as the deductibility of related medical expenses.35 In clear and good news, restitution ordered under the human trafficking offense statute is nontaxable.36 However, analysis around the taxability of other forms of recovery for sexual exploitation is murky. Beyond knowing whether financial recovery is taxable income, survivors may need guidance on how to invest and protect the compensation which is intended to cover costs that may last a lifetime.37 Certified financial planners and accounting professionals may suggest structured settlement annuities, special needs or minor trusts, custodial bank accounts, or educational or retirement savings instruments, which all have their own tax implications and complications as well. For example, while trafficking recoveries may be tax-free under specific statute, they might not be eligible for a “qualified” structured settlement.38 Each crime victim’s circumstances are unique, but many need to protect the funds from third parties. Free professional tax and financial planning advice is the key to maximizing recovery.
d. Financial Literacy
Abusers financially exploit victims as a means for profit and continued coercion.39 During exploitation, money may symbolize forced or coerced rape, or the necessity to self-medicate, or the measurement of worth based on commercial sex profits.40 Therefore, victims often exit trafficking with a distorted understanding of money and its purpose. They may never have been exposed to financial education in the first place. Access to the tools to reframe a relationship with, and understand how to manage, money is important to avoid re-exploitation.41 “Economic empowerment is the transformative process of moving away from exploitation and toward increased choice and opportunities to gain independence, stability, skills, and advancement in all areas related to one’s economic well-being.”42
No one government agency, system of justice, private sector program, or service provider will sanctify the right to financial wellness for every survivor of exploitation. We must continue to fight and innovate to put compensation in the hands of victims who deserve protection and prosperity.
Footnotes
1 https://www.bu.edu/pilj/files/2024/04/ByrneCarter.pdf
2 See Guiney, H., Caspi, A., Ambler, A., Belsky, J., Kokaua, J., Broadbent, J., . . . Poulton, R. (2022). Childhood sexual abuse and pervasive problems across multiple life domains: Findings from a five-decade study. Development and Psychopathology, 1-17. (CSE survivors are more likely to experience internalizing, externalizing, and thought disorders, suicide attempts, health risk behaviors, systemic inflammation, poor oral health, sexually transmitted diseases, high-conflict relationships, benefit use, financial difficulties, antisocial behavior, and cumulative problems across multiple domains in adulthood); Viliardos, L., Murphy, N. and McAndrew, S. Mental health challenges facing male survivors of child sexual abuse: Implications for mental health nurses. Int J Mental Health Nurs, 2023; 32: 490-501, citing to Chen, L. P., Murad, M. H., Paras, M. L. et al. (2010). Sexual abuse and lifetime diagnosis of psychiatric disorders: Systematic review and meta-analysis. Mayo Clinic Proceedings, 85 (7), 618–629; Mendal, M. P. (1995). The Male Survivor: The Impact of Sexual Abuse. London: Sage.; Fisher, C., Goldsmith, A., Hurcombe, R. & Soares, C. (2017). The Impacts of Child Sexual Abuse: A Rapid Evidence Assessment. London: Independent Inquiry into Child Sexual Abuse; and Easton, S. D. & Kong, J. (2017). Mental health indicators fifty years later: A population-based study of men with histories of child sexual abuse. Child Abuse & Neglect, 63, 273–283. (impact of child sexual abuse on males include anxiety, fear, shame, low self-worth, depression, suicidal ideation, sexual confusion, anger, aggression, PTSD, sexual dysfunction and substance misuse).
See Cutajar, M. C., Mullen, P. E., Ogloff, J. R. P., Thomas, S. D., Wells, D. L., & Spataro, J. Psychopathology in a large cohort of sexually abused children followed up to 43 years. Child Abuse Negl., 2010; 34(11), 813–822 (negative mental effects consistently associated with child sexual abuse include post-traumatic symptoms, depression, substance abuse, helplessness, negative attributions, anxiety, aggressive behaviors and conduct disorders); Gauthier-Duchesne, A., Hébert, M., & Blais, M. (2022). Child Sexual Abuse, Self-esteem, and Delinquent Behaviors During Adolescence: The Moderating Role of Gender. J of Inter Viol, 37(15–16), NP12725–NP12744. (male CSE victims display lower self-esteem than female victims, though the opposite tendency exists among non-victimized populations).
3 See Assini-Meytin L.C., Thorne E.J., Sanikommu M., Green K.M., Letourneau E. J., Impact of Child Sexual Abuse on Socioeconomic Attainment in Adulthood, J of Adolescent Health, Volume 71, Issue 5, 2022, Pages 594-600 (CSE victims had lower educational attainment, lower odds of being financially stable, and a decrease in household income compared to their peers; males victims in particular reported a 21.4% loss of income attributable to the victimization). Bouchard S., Langevin R., Vergunst F., Commisso M., Domond P., Hébert M., Ouellet-Morin I., Vitaro F., Tremblay R. E., Côté S.M., Orri M., Geoffroy M., Child Sexual Abuse and Employment Earnings in Adulthood: A Prospective Canadian Cohort Study, Am J of Preventive Med, Volume 65, Issue 1, 2023, Pages 83-91 (child sexual abuse is associated with socioeconomic inequalities by middle adulthood, particularly for severe forms of child sexual abuse which includes penetration).
4 See Tink Palmer, Behind the Screen: Children who are the Subjects of Abusive Images, Viewing Child Pornography on the Internet. (2005), 63–64 (E. Quayle & M. Taylor Eds.) (Victims of child pornography suffer additional types of victimization which have been acknowledged by both Congress and the Supreme Court identifying those harms as separate from the harm of production. This additional ongoing victimization leading to greater long-term consequences including negative psychological, social, behavioral, and economic outcomes). See also Binford et al., Beyond Paroline: Ensuring Meaningful Remedies for Child Pornography Victims at Home and Abroad. Child. Legal Rts. J. 117 (2015), 35(2), 117–162 (The sharing of child sexual abuse images revictimizes children and has a debilitating effect because digital images are virtually impossible to permanently destroy and this revictimization may continue for the rest of their lives due to the nature of the Internet); New York v. Ferber, 458 U.S. 747, 102 S. Ct. 3348 (1982) (“[P]ornography poses an even greater threat to the child victim than does sexual abuse or prostitution. Because the child’s actions are reduced to a recording, the pornography may haunt him in future years, long after the original misdeed took place. A child who has posed for a camera must go through life knowing that the recording is circulating within the mass distribution system for child pornography.”).
5 Id.
6 U.S. Sentencing Comm’n, Rep. to Cong., Fed. Child Pornography Offenses 5, 328 (2012).
7 https://www.apa.org/topics/women-girls/trafficking-women-girls.
8 18 USC 1593(b)(3).
9 See 18 U.S.C. § 1593 (Mandatory restitution for human trafficking offenses) and 18 U.S.C. § 2259 (Mandatory restitution for sexual exploitation of children offenses).
10 18 U.S.C. § 2259(c)(2)(A-F).
11 https://htlegalcenter.org/wp-content/uploads/DOJ-Article-Restitution-for-Victims-of-Human-Trafficking-1.pdf (“a prosecutor’s restitution request should include the potential lifetime of rehabilitation and healing. Even a short period of exploitation in commercial sex can cause significant psychological harm to the victim”)
12 18 U.S.C. § 2255.
13 18 U.S. Code § 1595.
14 https://htlegalcenter.org/wp-content/uploads/2022-CivLit-Report.pdf
15 https://sharedhope.org/PICframe9/ib/Issue_Briefs_5.7.pdf
16 https://reportcards.sharedhope.org/wp-content/uploads/2024/02/2023-Issue-Briefs-4.2.pdf
17 Id.
21 Id.
22 https://alightnet.org/wp-content/uploads/2023/03/Legal-Deserts-Report-2.pdf; https://www.mvalaw.com/media/news/15115_Law360%20-%20Meeting%20The%20Legal%20Aid%20Needs%20Of%20Human%20Trafficking%20Survivors_67_.pdf
23 Id.
24 Id.
26 https://casttta.nationbuilder.com/debt_bondage_repair_act_guide
29 Survivor Inclusion Initiative (SII) | United Nations University
30 UNUCPR’s 2022 Policy Briefing/Review of Survivor Inclusion Initiative
32 Lessons from the Survivor Inclusion Initiative
33 Modern slavery survivors need more support from financial institutions | American Banker
34See Tax Implications of Settlements and Judgments, I.R.S. (Oct. 8, 2025)(exclusion applies to payments received to cover medical expenses, pain and suffering, or emotional distress flowing directly from a physical injury) https://www.forbes.com/sites/jeremybabener/2026/03/29/survivors-see-progress-on-tax-protections/; https://www.htlegalcenter.org/wp-content/uploads/An-Advocates-Guide-to-Tax-Issues-Affecting-Victims-of-Human-Trafficking.pdf
35 26 U.S.C. § 213(a), disallowing deductions of medical expenses previously compensated for.
36 https://www.htlegalcenter.org/wp-content/uploads/An-Advocates-Guide-to-Tax-Issues-Affecting-Victims-of-Human-Trafficking.pdf (citing to IRS Notice 2012-12, 2012-6 I.R.B. 365 stating “[m]andatory restitution payments awarded under 18 U.S.C. §1593 are excluded from [a trafficking victim’s] gross income for federal income tax purposes”).
38 26 U.S.C. § 130(c)(2)(D) provides largely tax-free treatment for traditional structured settlements in cases of recovery that are tax-free based on a physical injury, but not based on trafficking.
42 https://acf.gov/sites/default/files/documents/opre/OPRE_economic_empowerment_oct2023.pdf (p. 8).
Originally published by The National Crime Victim Law Institute (NCVLI).
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