It's annoying and insulting.

I know this person.  And I'm pretty sure said person is a pathological liar.  So, let's see:

Pathological lying is a criterion for other psychiatric disorders, not one in itself. How does a person recognize and deal with pathological liars?
When used properly, this refers to people who lie constantly to get their way and do so with little concern, regard or respect for the feelings and rights of others. It’s often associated another psychiatric disorder. Pathological liars are often goal-oriented as long as they get their own way. They are usually seen as manipulative, cunning and egotistical.

Warning Signs of Pathological Liars

A pathological liar might exhibit the following behaviors:

• Lie to control and get their own way
• Often change stories
• Exaggerate, lying about almost everything, but tell the truth about major ones
• Not value truth
• Live in their own reality most of the time
• Behave defensively when questioned or challenged
• Lie for sympathy
• Don’t admit they lie
• Contradict what they say because they don’t remember their lies, although there are exceptions

Yep.  Sounds about right.  So what do I do?

Options - How to Deal with Pathological Liars

Coping with these liars can be frustrating. Sometimes it’s hard to separate truth from their lies. It’s best not to confront these liars directly because, they will probably become defensive and rationalize by lying again, they might be angry or they might exhibit both behaviors. There are other options for dealing with them.

• Some believe that one should suggest the liar seek professional help. This can be a delicate situation because these liars don’t see anything wrong with their lying. Some believe their lies. In both cases it’s likely they would be offended and get angry. It’s the least desirable choice.
• Others believe one should realize the person is a pathological liar and to ignore the lies.
• People, when they hear two different versions of an event, can act confused and say, “I thought you said…. Please help me to understand.”
• The last option is to end the relationship with the liar, if possible.

*sigh....

None of these sound good to me.  : (