The scam plays on people's gullibility, and those who worry about being "found out" (shamed) about visiting an (any) adult site.
How it works:
1) Scammer creates a profile. Posts pics of someone attractive (probably not them):
2) Befriends as many guys (typically) as possible, in a short space of time.
3) Asks them to go on Skype.
4) Does not appear, but records the video / images of the person being scammed.
5) Scammer posts the video (with associated person's Skype / real name) on Youtube, then demands money.
6) The gullible victim who doesn't want to be associated with the site, sends over an amount via paypal.
If you're at all worried about being associated with an adult site such as this, or any other, DO NOT open up a video chat or send pictures to anyone you don't trust.
The same goes for posting images of yourself on your profile which are viewable to the public. If you are fine with anyone seeing you are here, then go ahead. If you want to post images of yourself, but keep them private, set up a private gallery, and make sure only people you absolutely trust, have access. Once you post an image in the public domain, it's impossible to control who uses it for whichever nefarious purpose.
DO NOT pay anyone anything. Even if you are using your real name on Skype, and they have a video / images of you, what are they likely to do with it? Report the scammer to Youtube and have their account canned.
I will contact Skype now, with screenshots of the scam. The member will also be reported to the police. Paypal will also be involved, as it's abuse of their system. The scammer will need to have provided them with a bank account, so the authorities should be able to track them down, and make an arrest.
This can happen to you on ANY website.
Here's an example of a twist on this, where the victim was snared on Facebook. The BBC reported on it last year: http://www.bbc.co.uk/news/magazine-37735369 It happens on mainstream sites, as well as those classified as "adult".
It's been going on quite some time. Here's some useful advice about staying safe online.
And an excellent guide to safe social networking.
Be careful with your privacy people, everywhere online!
Nicola