When a person over-exaggerates something ridiculous that has happened to them (basically the problem was created specifically to get attention) I have a hard time holding back my thoughts about it. Sometimes I will shut down, walk away, or go blank and bare the abuse until it passes (out of respect for the environment). Or, I call them out on it.
Circumstances matter but if it is affecting you then you should do something about it. Calm and in control communication. State the problem to the person, give them your perspective, hear them out, and then see where it goes from there. It usually doesn't go well because people do not like to be called out on their shit. What you would be doing is pointing out a major flaw in their character and it hurts these individuals to know that someone sees them differently then how they have tried to portray themselves. You are telling them that they are not perfect which equals failure in their minds. So you should expect the tables to be turned on you (go in prepared) in anger.
It may seem harsh, but this is (at times) exactly what is needed.
If the problem is affecting you or people that you care about, then you should act on moving towards a solution.
My take.