They typically aren't "created". Some come from distortions in meaning from repeating them from person to person many times, until the story is far beyond the truth.

Other times, someone just makes something up as a prank and it catches on, and people keep telling other people, so that the chain of "a friend of a friend of a friend said blah blah" becomes untraceable.

The main reason that Urban Legends exist? People are gullible, they love to beleive the bizaare...

thats a really good question or answer , i always thought they were fabricated to warn people about things , could that be right?