noun
urban legend
A modern folklore story, often presented as true, that spreads through word of mouth or the internet.
この都市伝説はインターネットで広まった。
This urban legend spread on the internet.
彼はよく都市伝説を信じている。
He often believes in urban legends.
伝説 is a general legend or tradition, often historical or mythological, while 都市伝説 specifically refers to modern, urban folklore.
Compound of 都市 (toshi, 'city, urban') and 伝説 (densetsu, 'legend'). A calque of English 'urban legend'.