Charlottetown police are investigating several instances of sextortion recently in the city.
Police said people set up fake dating profiles through online dating sites and other social media sites, and invite victims into consensual online conversations.
Police said the chat then becomes sexual and the victim is encouraged to move to video chat. During the video session the victim is lured into engaging in sexual acts.
Police said victims are secretly videotaped and extortionists then demand a sum of money, or threaten to expose the explicit video.
Deputy police chief Gary McGuigan said there have been three reports from city residents in the last few months.
He said these people did not send in money, but he expects there are likely others who have.
"Given the nature of the crime and the potential embarrassment that surrounds it, a lot of these things will go unreported, "said McGuigan.
"We don't have the statistics to say how many people have sent money. But we would encourage people not to send money. People are embarrassed by what they've done. So they won't report it because of that."
McGuigan said victims are being asked to send $500.
He said that anyone who has fallen for this is encouraged to contact police immediately and not to send any money to the suspect.