According to KRMagazine, the problem is most prevalent in Latin America and is growing in Mexico.
Internet security expert Joseph Steinberg told CNBC that the criminals typically do not demand a big sum of money, instead preferring to get the payment right away and insisting that the person from whom the ransom is demanded stay on the phone with them for fear that if connection is established with the alleged victim, the scam will be exposed.
"It's very different from typical kidnapping where they don't want the line traced. Here, they want to stay on the line with you," Steinberg said.
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"They're leveraging the fact that if I can't reach my child for example and someone tells me my child is in danger, I'm likely to do whatever it takes quickly to make sure that my child is safe, and that carries on into various forms of scams."
Hostage insurance broker Michal Gnatek told CNBC that some insurance policies cover most types of extortion, including virtual kidnapping, but he is not aware of any stand-alone coverage for virtual kidnappings.
As far as how much money criminals made from this type of extortion, the Federal Bureau of Investigations (FBI) told CNBC that those statistics are not currently available for release.