Police said the scam, using a number of social networking sites, appears to involve a number of false Facebook profiles posing as modelling agencies, even using agency logos to appear genuine, reports the Daily Mail.
They then contact children via email asking them if they are interested in modelling.
After a series of emails, the children are pressurised into sending photographs of themselves in their underwear.
The modelling agencies appear to be Leicester-based, the force said. The most recent used is the Pat Keeling Modelling Agency, a spokesman added.
However, Pat Keeling Modelling Agency does not have a Facebook site, and has pointed this out on its own genuine website.
"We would never approach people we do not know, people approach us. We do not use social networking sites to contact people. If someone is interested in modelling then they should visit a reputable modelling agency and have a face to face chat," said Pat Keeling.
Detective Sergeant Ed Jones, from Leicestershire Police's paedophile and online investigation team said, "Do not be fooled by these emails, a reputable modelling agency would never approach you in this way."
"Do not post pictures online of yourself posing in your underwear and if you are under 18 these photographs may be indecent under UK Law.
"You have no control when posting photos on the Internet where they may end up and they could appear on the Internet forever," he said.