"I haven't as yet told them"
Do it.
In general, if you get an email like that (specifically the cry for help from someone you know "in trouble in a foreign country") it's a good idea to send them an email (or other communication) immediately advising them to change their password. To a stronger password if it wasn't a good one before, but most important, just change it as soon as possible because until they've changed it the scammers can continue to access and abuse their account.
Until somebody tells them, they may not know it's happened.

I've heard of people closing their account after events like that. I think that's unnecessary unless there's a further reason for doing so - once you've changed your password the scammers have no access to your account any more, unless they got it by snooping on your communications with a packet sniffer or key logging software, in which case nothing is safe until you've fixed THAT problem with virus and malware scans etc.

There's another kind of email that does the rounds from time to time: that's the "tell everybody you know" style of warning about some kind of virus or scam. You can usually look them up on snopes.com and confirm that it's a hoax, and in that case your sender hasn't been hacked, they are just gullible. Nobody needs to change their passwords for that, but if I get one I usually send them a reply (and to all the other recipients if known) with a link to the snopes.com entry explaining that it's a hoax, and recommending them to check next time they get an email like that.

Also you can some times get general spam that's apparently come from someone you know (or even from yourself). That's simply had the headers forged and doesn't mean your friend's account has been hacked. They don't need to take any action, and your only solution is better spam filtering.