A "serious blackmailing incident" involving sextortion by children is being investigated.
It is claimed the children were in possession of indecent images and were threatening to distribute them on social media "unless payment was made".
Police said the allegations, involving children in the Cullompton area of Devon were being taken very seriously.
The Devon and Cornwall force said no further details would be released at this stage.
"I can confirm it's an ongoing investigation, but it's in its early stages and our priority is to protect the alleged victim," a spokesman told the BBC.
On its Facebook page, Cullompton Police said: "This is a good opportunity to remind parents to take the time to find out what their children are doing on their phones and other devices, and encourage them to talk to you about any issues they may be having."
According to figures released by the National Crime Agency, the number of UK sextortion victims has risen threefold in just two years, with 1,304 case reported to its Anti-Kidnap and Extortion Unit (AKEU) by police forces across the UK.