The early 20th century folksong collectors sometimes got caught out, too. Many of them thought it only fair to pay their sources for their time and trouble; but not all of them had the social skills needed to make friends of the old buggers at the same time. Cecil Sharp was good at it, and, though he rarely had any spare money, would send little presents of tobacco and sometimes copies of a book in which an informant's song had been published; that sort of thing. He was remembered with affection by many of his sources long after his death, and nobody took the piss out of him.

I think it was Dr George Gardiner, though, who paid on a "per song" basis; and realised, after a while, that some of the old fellows were making stuff up when they ran out of genuine songs. He was quite upset by that; but many of them were dirt poor (and living in workhouses, which weren't abolished till a bit later) and you can't blame them for being a bit inventive in the circumstances.

It still happens, though nowadays the misinformation tends to be spread either by people whose memories aren't too good ("my old sainted mother, god bless her, used to sing that one to me when I was a wee child back in the old country"; of a song written ten years or so ago) or by performers who have got used to being looked up to and tell lies in order to bolster their importance ("my old sainted mother, god bless her, used to sing that one to me when I was a wee child back in the old country"; I can think of one glaring example discussed here a few times, though I've promised to leave that one alone until the person in question is dead, as apparently he takes badly to being challenged) or by performers who will say anything that pops into their wee heads in order to make their act more entertaining (the Fureys, for example, will trot out any old nonsense if they think it will go down well; which would be fine except that people actually believe them).

Regrettably, people will tell lies, and some will think themselves clever when others, who have no particular reason to disbelieve them, accept the lie as truth. Folklore studies are full of examples of that. The trouble is that the lie is often more interesting and romantic than the truth (jacobite songs, for one) and few people enjoy having their romantic illusions shattered.