Is there a name for this particular effect?

It's funny(and a little scary) how rumours can become fact. If a person told someone something, and he/she believed it, he'd tell someone else. From 1 person to 10 people and to 100 people and then maybe even a million. In fact, the effects can be so pernicious that it's taught as fact from generation to generation, but i digress.

In chinese, we have a proverb for this - yi ren chuan shu, wan ren chuan zheng. Literally and metaphorically, it means 1 person saying something is definitely false, but when there's 10 thousand people saying it, it turns true.