How do you react when someone is lying to you in your face and you know the truth?

Anonymous
I have a friend who lies about everything, and make herself look like the hero (in good scenarios), and the victim (in the bad ones). Today she lied to me about her "evil" colleague who tried to get her fired for no reason. But in reality, my friend did a HUGE mistake that anyone would get fired for, but of course she didn't mention that. I'm tired of listening to her whining and complaining when everything she says is a lie. What should I do about it? Confront her or let it go?
How do you react when someone is lying to you in your face and you know the truth?
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