Although I don't have much more to add, it is common policy for news outlets to use full names. There are a number of reasons for it, but credibility tops the list. I don't know the premise of the story, but as stated above, no reporter will ever show the source the article before it is published.
Situations like this are often taken to an ombudsman, but there has to be a valid claim and I believe most news outlets get complaints like this on a daily basis.
Most of this is all covered in an outlet's ethics and standards guide. Perhaps your friend can take a look at the Herald's?
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