Daniel Perry, 17, from Dunfermline, Fife, took his own life after a Skype conversation with someone he believed to be a girl the same age as him.
However, a gang then hijacked the chat and threatened to show the video to his family and friends, unless he paid them off.
Child welfare charities have warned that they are getting dozens of calls every week from suicidal children as young as 11 caught in the same trap.
Daniel Perry was targeted by online blackmailers
who told him they would hand a video to police of his chat with who he
thought was a girl of his own age
He was targeted by people who it is believed found his Skype address when he tweeted it
In this case apprentice mechanic Daniel Perry was ordered to put cash in a specific account or he 'would be better off dead'.
A source close to the family said: 'Knowing him as I do, he has felt embarrassed, horrified and has thought he's let everybody down.
The teenager was a trainee mechanic in Dunfermline, Fife, where he lived
'He was coming up for his 18th birthday so it's not as if we could have been checking what he was doing on his laptop.'
She continued: 'However he wasn't doing anything wrong, just what anyone his age might do, but this scam is all about exploiting young people.
'Even if he came to me and said he needed money we'd have helped him but we knew nothing about any of it.'
She added: 'He was not the type of person who let things get him down. He was a happy laddie, not depressed and the last type of person you would think would take their life.
'We're a very close family and I just wished he had come to me and said something. I would have gone on the computer and told them to P-off.'
On the day of his death, Daniel had posted his Skype details on his Twitter account telling followers to 'skype me.'
Shortly before killing himself, the youngster had asked the blackmailers via his laptop 'what can I do to stop you showing this to my family?'
He was then told to pay funds into a named bank account or his life would not be worth living and he 'would be better off dead'. He replied 'bye.'
Later that day he sent a text message to his Nan telling her he was on his way home but instead he ended his life.
He was still alive when rescued by a lifeboat crew about an hour later but died a shortly afterwards.
His mother said: 'When I feel strong enough I want to do something to stop this happening to other young people. I'll go to the high schools and tell them what can happen.
Daniel died on July 15 after jumping from a bridge just an hour after receiving the threat from the blackmailers
She added: 'He was the type to laugh things off. I still can't believe this has happened and expect him to walk in the door any minute.'
In a tribute from his family they said: 'You will be sorely missed ‘wee man' loved and missed by everyone.'
Hannah Smith had allegedly suffered months of abuse from online trolls on the website Ask.fm
The news comes in the wake of the death of teenager Hannah Smith who was found hanged in her bedroom after allegedly suffering months of abuse from online trolls on the website Ask.fm.
The 14-year-old, whose funeral is due to be held today, had allegedly been bullied on the website but it has also been reported she sent herself the majority of the abusive messages.
Her father, Dave, said those claims had not been proved and even if they were true still meant that there were a small percentage of people who had written his daughter abusive messages and had not been named.
Ask.fm was forced to defend its site and stated 'we do not condone bullying of any kind' after it was criticised for not doing enough to prevent abuse.
The website yesterday said it will delay announcing the findings of a safety review as a mark of respect to the schoolgirl because it was planned on the same day as her funeral.
The site engaged a team of lawyers to carry out an audit of its site and safety features following her death two weeks ago.
It is alleged she died after suffering months of abuse from online trolls on the question-and-answer website where members can be anonymous.
At Daniel's funeral, held at the Dunfermline Crematorium, £700 was raised for the Royal National Lifeboat Institution and the family thanked the Queensferry Units rapid response team paramedics for their help.
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