This is true, though arguably its down to the applicant to market themselves as being the best possible bet, wether they are actually the best thing since sliced bread or not. Its inevitable that some will be less than honest in the process of doing so.
Why not? The other option for someone without any work experience is to take a gap year and lose a year of their career. Taking a year off the end of their career stands to lose them a substantial amount of money, and hence there is quite an incentive to lie.
I'm sure most people don't lie just for that reason, but rather just because they want a damn place at a medical school