It can work both ways.

From what I've been able to find, it's apparently only a partially true story. Of course it would be nicer if it were totally true, but at least it's not fully made up.

In 2008 The British rock band The Get Out Clause which, judging from my on the whole unsuccessful attempts to find anything approaching recent information about them (either web references or YouTube videos), seems to have been short lived, or at least not very popular, prepared a video clip of their song Paper. The story goes that because they couldn't afford video equipment they performed in front of Closed Circuit Television (CCTV) cameras, and then via the Freedom of Information Act requested the footage from those cameras which was then put together into their video. That standard version reads:
Lacking the funds to produce a music video, The Get Out Clause took to the streets of London to perform, and then, following a request to the London Council under equivalent public freedom of information laws, requested all cctv and public surveillance footage of them playing! Voila - the London Council had unwittingly produced this music video for the song 'Paper'!
An article in the Telegraph gives us a bit more information:
"We wanted to produce something that looked good and that wasn't too expensive to do," guitarist Tony Churnside told Sky News.

"We hit upon the idea of going into Manchester and setting up in front of cameras we knew would be filming and then requesting that footage under the Freedom Of Information act."

Only a quarter of the organisations contacted fulfilled their obligation to hand over the footage perhaps predictably, bigger firms were reluctant, while smaller companies were more helpful but that still provided enough for a video with 20 locations.

"We had a number of different excuses as to why we weren't given the footage, like they didn't have the footage. They delete after a certain amount of time, so if they procrastinate for long enough, they can claim it's been deleted," Mr Churnside said.
But the web site of French television's English language Channel 24 informs us that it didn't take long until it was discovered that a good deal of the footage wasn't really from CCTV cameras. That article has a "response" to the claims of a hoax from the group's guitarist:
"It was not a hoax. The film did include a mixture of real cctv, mock ctv and hand held camera. The original intention was to use cctv exclusively, but it wasn't possible because of the limited footage we were able to get back under the government acts. After all, we're artists, not journalists or documentary makers and the most important thing for us was to make a video that looked good. If we had only used cctv and nothing else the video itself would have been very one dimensional with no interesting shots of people's reactions. But there was no big camera crew or production company
So even if it was too good to be fully true, there's some truth to the story. And even as a hoax it's a great idea.

Go to: Common knowledge, or
Go to: Ain't no need to hide, ain't no need to run.