© Yuya Shino / Reuters
Organized gangs, made up of actors in studios and money launderers, run the 'sextortion' operations. They are based all around the world and often target young British men by luring them into potentially-compromising positions.
Victims are befriended online by people using fake identities, and persuaded to perform sexual acts in front of a webcam. They are then threatened that the images will be made public if they don't pay up.
The NCA says police have had 864 reports of webcam blackmail in 2016, but it says the number is probably higher as many victims are too embarrassed to come forward.
The highest proportion of victims is aged between 21 and 30 years. Some are as young as 11.
'Sextortion' has been linked to at least four suicides in the past year, the NCA says.
Ronan Hughes, 17, of County Tyrone, Northern Ireland, took his own life in June 2015 after being subjected to a "relentless"campaign of bullying by a Nigerian gang.
He was duped into posting intimate photos online after receiving pictures of a girl and then blackmailed for £3,000 (US$3,731) by criminals who threatened to upload the images to the Facebook pages of his friends.
In October, police investigating the webcam blackmail linked to Hughes' death charged a man in Romania and he was remanded in custody.
Other victims of 'sextortion' have spoken out. 'Gary,' who is from Hampshire and in his teens, had been speaking to a woman online for some time, according to the Mirror. She suggested persistently that they move the conversation onto Skype and asked for his Facebook profile and picture.
"She was halfway across the room. It lasted for around 30 to 45 minutes, all on the phone. She said 'show me a bit more, show me your face.'
"Then the messages came up: 'pay £500 or this is going all over Facebook - I want £500.' Then she started listing my friends' details. I said I could not afford £500, she said £200 was the lowest. I said I could only pay £50.
"I offered to go to the bank, but went to the police station instead. I was trembling throughout the whole thing, shaking and thinking, 'What's going to happen?'"
Another victim, John, who is in his 60s and from Hertfordshire, took to online dating after splitting from his wife. He eventually met a woman on a Filipino site that a friend had recommended to him.
The woman suggested they speak on Skype. When they did, she suggested if he removed some of his clothes she would do the same.
"I'd had a few glasses of wine so maybe my inhibitions had dropped a bit and I agreed. Straight away after that, the threat began.
"They said 'Now I've recorded you. If you don't pay me, I'll put that video all over Facebook and YouTube.'"
Roy Sinclair, from the NCA, says the crime of 'sextortion' is new, so the NCA and police are working with the Home Office to get a more accurate picture of its true scale.
"However, the trend is clear. Cases of webcam blackmail - or sextortion - are going up dramatically.
"As recently as 2012 we were only getting a handful of reports a year, now we're getting hundreds, and our law enforcement partners across Europe are reporting a similar picture."
Authorities have released a new awareness campaign "in response to a really worrying emerging threat in terms of what we call sextortion."
The NCA's advice to any potential target is: "Do not panic, do not pay, do not communicate and preserve evidence."
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