I REALLY hate people like that. My mom's a pathological liar. She believes every lie she tells, so in her head if あなた contradict her your the liar. I never found out a way to deal with it (it's probably incurable) but she moved out so i don't have to worry about it now.
I know a girl with this condition, and honestly, she is so annoying to the point that no one likes her. I don't believe a word she says anymore. And yeah, I agree with Shadowmarioking, Pinocchio's nose could do them some good. XD