I have a friend who told small lies throughout our school years - she had a boyfriend (she didn't), she had an exotic middle name (she doesn't), she'd had an older sibling who died (to the best of my knowledge... she didn't, although it's not something I will ever ask her parents!). Then, during university, she got kicked out in the second year for not doing any work/missing lectures - and she started to claim that it was for medical reasons. She claimed to have a very specific type of cancer. And myself and another old school friend (who genuinely did have cancer at this point) were very concerned, wanted to know how best to support her and so forth. It got to the point where, a couple of years later, we approached her mother and asked "what can we do to help?" - only for the mother to look at us as if we'd somehow lost the plot, and say "what on earth are you going on about?! X doesn't have cancer of any sort!" The friendship limped on for a few more years, with friend still claiming on various "specialist" FB groups (which show up in her feed) that she's dying, that she's "had it with useless doctors who can't diagnose" her, and so forth), but then she told the biggest lie of all.
That her second husband wasn't abusing the daughter she'd had by her first husband.
And... well, I posted on here for advice about this because I was so genuinely shocked by the lies my friend was (still is) telling to herself, whilst throwing a vulnerable teenager under the proverbial bus. I reported her to social services, and her younger children are now in the care of friend's parents. Older daughter has always lived with her father (who also got tired of the constant lies friend told - he had her sectioned, according to her, because she'd "had a bad day" with regards to cleaning the house/looking after their newborn daughter. I know how hard it is to try to have someone sectioned for their own safety - it takes something drastic, not just "oh, I didn't wash a couple of saucepans up and the baby was crying when he came home from work"...!).
Friend was an only child, adored by both her parents (although her mother was very strict) and spoilt. To the best of my knowledge, there was no childhood abuse/trauma - although, frankly, my childhood probably looked the same as hers, and I was sexually abused at 7 and raped at 10, so... who can actually tell?! Her compulsion to lie got worse, the older she got. She doesn't lie to me anymore, though, because she knows, now, I've always seen through her. And because of the lies she told, mainly to herself, so that she felt better in choosing her husband over her daughter, she also knows I'm willing to call her out on them - regardless of whether that destroys our friendship forever, or not. Her lies began small, though, and escalated. I suspect that most compulsive liars like to push boundaries to see what they can get away with claiming/telling people.