Sometimes they did.
Sometimes they took a few facts and created a whole new scenario out of their head.
Sometimes they collected what the thought were facts and came up with a reasonable scenario, just to find out the original 'facts' weren't facts at all.
Sometimes they pass off theory as fact.
Sometimes, they simply don't know what they're talking about.

But when people come up with stuff, they really need to label it as fact or fiction or theory or opinion.

If you've ever read The Amityville Horror: A True Story by Jay Anson (1977), would you say it's truth or fiction?

Sue