There you are, eating your sandwich with Mary and Jane, when Jane says something about an old acquaintance of hers. This friend is called Anne. Jane does not know that you know Anne, and she has not named Anne, and Jane is telling the story only to make a point. Still, you don't think Jane should be telling this story. You think about how hurt Anne might be if she knew Jane was using her story--however anonymously Anne appears in it--to make a point.
So what do you do?
"I think Anne ought to know," you say and go out of your way to contact Anne ASAP.
Or maybe you resist the temptation and keep your mouth shut. Perhaps later you send Jane a quick email saying that you know Anne, and you know Jane would hate it if she inadvertently hurt Anne, so with all the good will in the world--for you do see the importance of the point Jane was making--you hope Jane does not mind if you suggest she be even vaguer in the example she gives! You hope Jane isn't too embarrassed by your email. Let's get together soon. Yours sincerely, You.
Alternatively, especially if you honestly don't like Jane for whatever reason, you can do and say nothing except reflect that Jane's chatter is going to get her into trouble one day.
One of the lessons age brings, my little poppets, which is why I know to tell you, is that it is never good to be the bearer of bad news.
Sometimes you have to be the teller of bad news, but almost never do you have to be the BEARER of bad news. Advice columnists all seem to be at one on the subject of "I saw my friend's husband/wife in a cocktail bar/restaurant with another woman/man. Should I tell my friend?" They all say NO. But they also say that if your heartbroken friend asks you directly, "Did you ever seen my husband/wife with another woman/man?" then you are free to say, "Yeah, I did."
It is fun to share news. I pester my husband and friends back in Edinburgh for updates. And I think a certain amount of warm-hearted gossip (e.g. Sally won the President's Medal; Hector convulsed the table with his jokes; Cyril refused to undo his tie even though the room was baking) is both inevitable and harmless. Indeed, I would go so far as to say it is a good thing.
However, it is wrong to sow discord and strife. First of all, it hurts people and second of all, it subtly changes how people feel about you. Traces of the pitch of the bad news you bear sticks to your hands.
The traditional name for a person who needs to tell Anne what Jane said about her to Mary is "tale-bearer." But another one, said with irony, is "kind friend." We don't want to be "kind friends"--we want to be kind friends. And a kind friend does not think "Gosh, that would hurt Anne if she knew" and then makes darned sure Anne finds out.