There is a new scam on the Web that very effectively scares users and attempts to extort them. But this scam has no teeth.
Typically a user will have been on a porn site and subsequently they receive an email showing your password (and the fact that the password is correct is what really scares folks) and saying that while you were on the porn site all of your contacts were downloaded. The scammer threatens to send a split screen video of your face from your webcam along with the video you were watching to many of your contacts. Generally they want you to send a ransom to a particular address to keep them from doing that.
By all accounts the ransomer doesn’t have the goods to follow through on their threat. The scammer has your password from a previous large break-in to company or Web site. (There have been a shocking number of these reported in the press over the last number of years.)
So, if you are confronted by this scam, all that you need do is make sure that all of your passwords are updated, and you should be fine to then ignore this scam. There is no malware on your computer and nothing is going to be sent to your friends/contacts.