Background. Patients diagnosed with schizophrenia consistently demonstrate impairment in memory acquisition. However, no empirical consensus has been achieved on whether or not patients are more prone to produce false memories. Method. A visual variant of the Deese-Roediger-McDermott (DRM) paradigm was administered to 35 schizophrenia patients and 34 healthy controls. Recognition and recognition confidence were later tested for studied and lure items. Strong contextual cues at recognition encouraged adoption of a gist-based retrieval strategy, which was predicted to elicit over-confidence in errors and increase the false memory rate in patients. Results. Patients were significantly impaired on true item recognition but did not display more false memories than healthy subjects. As predicted from prior findings by our group, patients were more confident than controls for lure items, while being at the same time under-confident for studied items (reduced confidence gap). Conclusions. Although patients did not produce more false memories than controls, such errors were made with higher confidence relative to controls. The decreased confidence gap in patients is thought to stem from a gist-based recollection strategy, whereby little evidence suffices to make a strong judgment.