There's a famous criminal case in Icelandic history, still unresolved, that every Icelander knows. It involves the disappearance and suspected murder of two men, Gudmundur Einarsson, in January of 1974, and Geirfinnur Einarsson in November of the same year.

The first, Gudmundur, was heading home from a nightclub when, drunk, he decided to walk the freezing 10km journey back to his house. He was seen by a few drivers, stumbling about or failing to hitch a ride. It's not known when he disappeared into the landscape, but he never made it home, his body was never discovered. Icelandic authorities searched for him for a few weeks, but disappearances are quite common in Iceland, and after a month they just wrote it off as a mystery.

Gudmundur would have likely been forgotten if it wasn't for the disappearance, that November, of Geirfinnur. One night he got a phone call and left his home to drive to a harbour cafe. He was never seen again. The police began to search for both men, wondering if the deaths were linked. The men weren't related, but the fact they had the same surname is an indicator of how close-knit Icelandic society is. At the time, Iceland had a population of just 200,000 people and a very low rate of crime: murders almost never happened. Despite this, the Icelandic police became convinced they were dealing with a double homicide, and came under pressure from the media to come up with answers.

The mysterious case is the subject of a new documentary, coming to BBC Four and Netflix this month, called Out of Thin Air. It's the first feature length film to tell the story of the Icelandic disappearances in detail, and like all good recent true crime thrillers – the Amanda Knox documentary, Making a Murderer, Serial – it takes as its heart a fascinating miscarriage of justice. What's different about the Icelandic case is that the people who were sent down for the murders confessed to the crime, even though they were innocent.

All six of the people charged, to a varying degree, suffered from what's called memory distrust syndrome – a phenomenon whereby you doubt your own memories so deeply that your mind starts to fabricate new ones, a type of "source amnesia", where the source of learnt information somehow becomes confused or replaced entirely.

The police eventually gave up on the investigations around both disappearances. But two years later, when they were questioning a 20-year-old woman named Erla Bolladottir on an unrelated fraud charge, they showed her a picture of Gudmundur and asked if she knew him. She told investigators she'd met him at a party and that she could recall a dream from the night he went missing, in which her boyfriend, Saevar Ciesielski, an LSD-taking petty criminal, was outside her room with what looked like a body. Saevar and four of his closest friends were quickly brought into the station, and along with Erla questioned intensively. Their stories kept changing, and details didn't all match up, but one by one they each admitted to their suspected crimes, and were eventually charged. Saevar got a life sentence, Erla three years, and the rest around 12 years each.

Crime reconstruction, Credit: Icelandic National Archive

Gisli Gudjonsson, a world-renowned expert in forensic pathology, is one of the leading researchers on memory distrust syndrome, and became interested in the phenomenon while working for the Icelandic CID in the 1970s, just as the case of the Icelandic Six was unfolding. He's since dedicated his career to explaining false memories in courts of law, as well as writing papers on its causes and effects.

"Memory distrust syndrome is a profound distrust of your own memory," he explains, "particularly during lengthy interrogation, where you begin to accept you've been involved in a crime which you have nothing to do with. It can happen when people fail to remember what they were doing at the time – if it was a long time ago, say, and they don't have their diary, or if drinking or substance misuse has made the memory weaker."

"They were given drugs like benzodiazepines and antipsychotics, allegedly to calm them down or because they couldn't sleep. The conditions were terrible, it was a perfect storm for those people to not know what's real and what's not real."

Gisli has worked on over 500 cases of memory distrust syndrome since the 1980s, when research on the topic started to emerge. He testified in the case of the Guildford Four, for example, the high profile false-conviction of four people who were suspected of an IRA bombing. Gisli's work has found that memory distrust syndrome tends to occur when a person is for some reason already vulnerable, or more prone to police compliance. They might have been kept in solitary confinement for a long time, they might be grieving, or mentally unwell, or they might have low self esteem and be overly willing to accept that they did something they shouldn't have. Then, the idea that they are guilty is usually impressed upon them by the police.

The concept is not to be confused with voluntary confessions, says Gisli, whereby people go to the police and say they did something because they're seeking attention or notoriety, or because they're taking on a case for a friend. Rather, it's a deep seated internal belief that you actually committed a crime you were not present for.

Gisli was brought in to testify in the Iceland Six case when it was reopened in 2011, after prison diaries of one of the men who had been charged with the murders were passed from the man's daughter to a reporter and showed serious signs of memory distrust syndrome, as well as foul play, such as the police drugging the suspects. For Gisli, it was emotional to return to a case he knew so well.

"The advantage of the fact I was there 40 years ago is that I knew what the atmosphere was like in the holding prison, how uncomfortable those small, solitary cells with just a bed were, how you couldn't even go to the toilet without ringing a bell," he says. In the documentary, he explains that the Icelandic Six's confessions were unreliable because they'd each been extensively interrogated for hundreds of hours, longer than in any other case he's ever worked on. "In Britain, it's three days, and if you're not charged you're out. But there it was endless: what to do with yourself?"

Erla Bolladottir's mugshot

Andy Glynne is the producer of Out of Thin Air, as well as a trained clinical psychologist. He was fascinated by the story of the Icelandic Six for what he calls the awe factor. "Those six people's lives were turned totally upside down," he says. "They had no idea when they were going to get out, had their loved ones taken away, and had no judiciary arm backing them up, because the police and the courts were run by the same people in Iceland back then. On top of that, the six were given drugs like benzodiazepines and antipsychotics, allegedly to calm them down or because they couldn't sleep. The conditions were terrible – it was a perfect storm for those people to not know what's real and what's not real." The other reason the story interested him, he says, was because, while in many ways it was extraordinary, it could happen to anyone.

Andy explains: "In the 1990s, one of the biggest studies on memory not related to forensic settings was psychologists Elizabeth Loftus and Jim Coan's experiment 'Lost in the Mall', where they asked a group of adults to remember childhood memories and got their family to help construct what those memories were: their favourite holidays, the clothes they wore. Loftus sat down with all of the participants, gave them five memories to remember, and in amongst the real memories she gave them a fake one: 'Remember the time you were lost in a mall?' None of them ever had been, but with prompts, not only did a percentage go 'oh yeah', but they started to fill out the gaps; how long their mum was looking for them, how great it was when they were found again. Twenty-five percent recalled a memory that never happened. So it's a normal thing. And that's a terrifying proposition."

Gisli has worked on a range of high profile cases where memory distrust syndrome has affected regular people, like a soldier whose friend fell off a cliff when they were walking home from a bar. Suspected of pushing the friend, ridden with grief and drunk at the time of the incident, the soldier failed a polygraph test and then confessed to the murder, later to retract his confession when the true memory returned. Gisli has also worked on a number of cases on death row in America that have helped to stop executions. "As an expert witness I work closely with the police, defence, prosecution and police to look at the vulnerabilities of people in the context they were questioned to try to help the court," he explains. "And what I and my colleagues have shown over the years is that, if you're genuinely innocent, you're surprised you're being arrested, you're not prepared and you basically want to get out. Even normal individuals, given the right circumstances, can make a false confession to murder and remember doing it as well."

Countries and law systems, however, aren't quick to agree that their systems are prone to false confessions, says Gisli. "When I was testifying in the USA, the view expressed to my colleagues and I was that false confessions don't happen in America. Then I go to other countries and hear exactly the same – 'We don't have those in Italy,' they say. There's a resistance; people have an inherent trust that nobody would confess to a crime like murder unless they'd done it because the consequences are so severe. But that's not true." Especially not, he adds, under governments around the world – including the latest Republican government in the US – which condone torture and rendition. "Confessions alone did, historically, lead to convictions. Today, theoretically, they shouldn't, but they do."

WATCH: Giants of Iceland

Cases like the Icelandic Six and the Guildford Four have shaped research on the topic, and since the 90s police and judges have become more aware that they need to be more careful in the police interviews to have a firm case in court, says Gisli. "The British police started using formal interviewing techniques – what's called the Peace Model, which is based on being open minded and transparent and searching for the truth, rather than assuming people were guilty," he says. His research has helped dictate what these guidelines are. "There should be clear questions, not leading questions – they shouldn't question people for more than six hours, and they should record from the start to the end." England is so ahead of the game on these interrogation policies, Gisli explains proudly, that Norway, New Zealand and Australia are now using adaptations of the Peace Model.

Still, the expert urges things not to stagnate. His worry is that while England is leading the field, police funding cuts could affect the interview training that police officers here receive. "Courts require details of what a person did, and I worry that another risk with cuts is that police rapport is cut down, trying to make it quicker with, 'Did you do it or didn't you do it?' Elsewhere, countries like America need to change their practice, Gisli says. "They've had around 350 DNA exonerations since 1989, proving confessions unreliable… but still, their tactics don't change."

Gisli believes that if the rules of the Peace Model were followed in the Iceland case, the false imprisonments would not have happened. "The courts were colluding with the police, turning a blind eye to the breach of codes of practice," he sighs. "There was a presumption that they got the right people, and the lack of bodies made them panic."

The fallout for those convicted has been severe as a consequence. In Out of Thin Air, Erla tells the cameras how fickle a thing she now understands memory to be, and that the moment you acknowledge your memories might not reflect your experiences; it can play havoc with your sense of self. After Saevar served his sentence he began to campaign for his innocence, but died before he was able to clear his name. The other men, says Gisli, still had to live with the confusion of why they confessed to a crime they did not commit.

"Imagine the anxiety of that, 40 years on."