Unbeknown to the victim, the online interactions are recorded so the scammer can later blackmail him.
Detective Senior Sergeant Aaron Pascoe said it was too early to say how many men across New Zealand had fallen victim to the scam.
"I can guarantee you though that there will be a lot of people falling for it," he said. "She's in on it, she's just the bait.
"They are asking for over $1000 and there will be people out there paying. And, once they start paying - the scammers just keep wanting more."
Mr Pascoe said the scam was reasonably well known to authorities, however victims rarely came forward as they were too embarrassed.
He said in the latest cases innocent Skype users were being approached out of the blue.
Mr Pascoe said it was easy to avoid becoming a victim.
"Be very careful who you are talking to online and what you do. If you do something compromising with someone you don't know, they can take photos and they can record it and then they can use it against you," he told the Herald.
Netsafe executive director Martin Cocker said the safety watchdog had received "a handful" of complaints about the scam in the past 12 months.
"The only way to avoid this situation is to keep your clothes on when on video chat sessions."
Safety Tips
• Don't accept anyone you don't know as a friend on Facebook.
• Don't share or pose for explicit photographs or videos online as they may be published later.
• Never give out personal information or pay any money to anyone you don't know.
• Contact the website administrator and/or withdraw from the site if you are being harrassed, intimidated or threatened.