I know this may sound a bit of a bad friend but, If they know they should not be hacking, it's their responsibility and choice if they want break the rules or not. So i would report them if they know they shouldn't be hacking.
If they are new or doesn't really know much about hacks or the rules, I'll say "Cmon Bro, it's not worth hacking", and urge him to stop hacking. Obviously If they continued to hack, i would unfortunately have to report them.
