The malware in question first encrypts files on the victim's computer and demands a payment for returning them to their original state.
It then ups the pressure by threatening to send to the police the "special password" required to decrypt illegal files supposedly found on the computer:
"There may be nothing in the hackers' threat of contacting the police and making accusations of child abuse material on your computer, but you can just imagine how petrified many people might be by seeing such a message," says Graham Cluley.
"Of course, we don't recommend paying money to ransomware extortionists. There's nothing to say that they won't simply raise their ransom demands even higher once they discover you are prepared to pay up."
In cases such as this one, it always pays to have current backups. If everything fails and you can't remove the malware from your computer by using AV solutions, you can always format your computer, reinstall Windows and restore your files from your backup.