The man, who is married, entered a sugar relationship late last year with a 20-year-old woman through US-based dating site Seeking Arrangements.
He showed the Herald correspondences he had with her. She claimed to be pregnant, but refused to go for a pregnancy test.
The man, in his 40s, said he had sex with the woman "a couple of times" and she had told him that she was on the pill.
"I called her bluff ... I set up a fake account on the site as someone else, and got the answer that I wanted. She wasn't pregnant," he said.
They managed to agree to a payment of a far lesser amount, which the man did not want to disclose.
"But at the end of the day, I felt that I was blackmailed into giving it to her," he said.
Another sugar daddy, a 51-year-old company director from Hamilton, said his life turned into a nightmare after he wanted to end a sugar relationship he had entered into six months earlier.
In the original agreement, also through Seeking Arrangements, the man was to give his 25-year-old sugar baby a gift of $1000 in exchange for two "intimate dates" each month.
But when he wanted to end the arrangement, the sugar baby demanded $15,000 and threatened to expose their relationship and send a photo they had taken in bed to his wife.
"It was a bloody nightmare, but I paid her because there was just too much to lose if I didn't," said the man, a father of three teenage children.
Both men did not make police reports as they did not want their identities to be "on public record".
Seeking Arrangements, which claims to have more than 50,000 members signed up in New Zealand, were approached for comment.
A police spokeswoman said police did not hold any data on whether crimes that had been committed were the result of sugar relationships.
But she encouraged people to report any problems they encountered to the dating websites involved and anything more serious to police.
The spokeswoman said people should exercise caution when meeting people online.
"Don't reveal your surname, home or email address, workplace information or any phone numbers until you completely trust the person you're communicating with," she said.
"Don't feel pressured to share any details before you are ready.
"Communicate through the dating website until you're absolutely ready to move onto the next step."