Last Friday, a 21-year-old Whitby, Ont., man was in a chat room with what he thought was a young woman.
The woman was actually a male who convinced the Whitby man to take off his clothes and fondle himself on webcam, police said.
The suspect then sent a recorded video of the incident to the man and threatened to post the video online if $700 was not sent to a Western Union account.
Police said the amount was requested in Euros.
Police said the suspect threatened to post the video on websites and also send it to the victim's friends on social media.
The man paid the amount, but when the suspect demanded more money, he called police.
On Sunday an 18-year-old Clarington, Ont., man had a similar experience on the same chat room site, which police have not named.
Police said the man unsuccessfully tried to pay the suspect with a credit card before a parent became involved and investigators were notified.
The suspect in this case also threatened to make the video publicly available if the amount was not paid.
Police are encouraging people not to compromise their financial or personal wellbeing by engaging in such risky online behavior.