The New South Wales (NSW) police said that eight "virtual kidnappings" have so far been reported to the force, including one case where a two million Australian Dollar (£1.1m) ransom was paid. Other ransoms have ranged between A$20,000 and A$500,000.
"Virtual kidnapping" victims believed they or their loved ones were in real danger and, according to NSW police, the scams have "developed considerably over the last decade" and is operating on an "international level".
NSW police said that the scammers pretend to be a Chinese authority or from the embassy or police.
How does the scam work?
Investigators were told that scammers would contact victims initially through a phone call from an individual usually speaking Mandarin claiming to be a Chinese official.
Scammers using technology to mask their physical locations then convince the victims to "continue communication" through various encrypted apps such as WeChat and WhatsApp.
Afterwards, the victims are "threatened to transfer large amounts of money" into "offshore" bank accounts.
In some cases, scammers convince the victims that their identities have been stolen, or that they have been implicated in a crime in China and that they must comply with their commands or they risk arrest or deportation.
NSW Police Force State Crime Command Director, Detective Chief Superintendent Darren Bennett, said: “While these phone calls appear to be random in nature, these scammers seem to be targeting vulnerable members of the Chinese-Australian community."
Scammers instruct the victims to stop contact with their family and friends, "rent a hotel room" and "take photographs or videos" that depict them "bound and blindfolded", these are then sent to the victims overseas relatives.
Police said often when relatives fail to establish contact with their child, they pay the huge amounts of ransom in exchange for their release.
Callers are said to keep making demands and threats for more ransom, until relatives are "unable to obtain more payment", which results in them finally contacting the police.
“While we are working with our law enforcement colleagues to investigate the origins of these scams, we are urging the community to heed our warnings not to respond to the caller’s demands,” Det Ch Supt Bennett said.
Currently there are more than 212,000 international students enrolled to study in NSW, most of them awaiting student visas to return to the state as Covid-19 restrictions are reassessed.
Law enforcement officials said they are also working closely with the NSW government and universities to provide "support" and "resources" to international students in the country, who fall victim to "virtual kidnapping" scams.
NSW police advice anyone who receives a call involving demands for money under the threat of violence to hang up, contact the Chinese Consulate in Sydney to verify the claims and report the matter to the NSW Police Force.