According to the 2004 Report to the Nation, a study done by the Association of Certified Fraud Examiners, anonymous reporting mechanisms (read: hotlines) are highly effective tools to detect fraud. Internal frauds are most often detected through tips from employees, customers, and vendors.
Sarbanes Oxley requires audit committees to establish confidential reporting mechanisms, so fraud hotlines can be a good option to meet that requirement. As a side benefit, companies with hotlines suffer fraud losses that are half those of companies without hotlines.
ACFE recommends EthicsLine as a quality provider of anonymous hotlines.
P.S. I was fortunate enough to be selected to participate in the study, so one of my cases is in the results of the 2004 Report to the Nation. How cool is that?