Do You Assume First-Person Writing is True?

As a writer, I've always enjoyed writing in the first-person more than third-person. (I bent over to tie my shoe, rather than she bent over to tie her shoe). I find that telling the story from the point of view of the protagonist allows me to use my "voice" to tell the story in a more entertaining way.

However, I've also noticed a trend: People tend to assume that everything written in the first person is true! Even professionals in the industry make comments, like the critique on a short story I recently submitted, "I'm not sure whether this is fiction or not, but it certainly is appropriate for our readers..."

Etc.

I laugh to myself, as this reminds me of a seminar I attended at last year's Backspace Writer's Conference. The author, who was speaking about techniques when writing erotica, was frank enough to point out that, "If it's going to bother you that everyone is going to assume you really do want to have an orgy with golden retrievers, then writing erotica, at least without using a pen name, is not for you."

Looking at my book shelf, I see that some of my favorites are written in the first-person. Did I spend the whole book thinking that in fact, the author must have truly experienced everything in the novel? That it is little more than a thinly-veiled memoir? Surely not. They are telling a story and just like my own life is not nearly as interesting as those I design in my craft, neither do I think that every author who writes in the first person must truly live in a sinister town with a sneaky sheriff, murderous politicians, and firsthand knowledge of a murder.

Do you?