WHOIS data – Urgent!!?

I have just subscribe a web hosting service with free .com domain name.
However, they put my real data inside. So, when ppl use WHOIS service to search for my domain, will see all of my details including name, address, hp number etc..

I ask them why, and they said I need to subscribe their Whois Protection Service which cost USD$6. I don’t like to pay them any additional fees, becoz of their bad and rude service.

Today when I login to my control panel, I suddenly found that actually I can change my WHOIS data directly from my control panel.

So, my question is:
Can I put fake data in? Is there any bad consequences?
Will it causes my domain easily being transferred by unauthorised party?

Please help…Thanks a lot!!