urban legend

from The American Heritage® Dictionary of the English Language, 5th Edition.

• noun An apocryphal story involving incidents of the recent past, often including elements of humor and horror, that spreads quickly and is popularly believed to be true.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

• noun A widely circulated story that is untrue or apocryphal, often having elements of humour or horror.

from WordNet 3.0 Copyright 2006 by Princeton University. All rights reserved.

• noun a story that appears mysteriously and spreads spontaneously in various forms and is usually false; contains elements of humor or horror and is popularly believed to be true