While exaggerating one's accomplishments is pretty common on resumes, I've never heard of flat-out lying being a routine practice. Does this happen a lot? Does it follow you around if you're caught? What are the potential consequences?
As far as I'm concerned, that's more or less fraud. If it, in any way, increased their chances of getting hired, it's a problem. I don't see how that can be a tolerable practice. I also don't think it's enough that some outside company wanted you to lie, it's still your resume.
There are ways to hide your lack of experience (for example, I once used paragraph form instead of bullet form, which makes every small thing seem more important and helps fill up space). You can also do small things without having to identify that they were small. Otherwise, the remedy is to actually do things you can put on your resume.
Well, that last part is the Catch-22. Nobody wants to hire you without experience, so you need a resume showing you have experience--but you don't have any. Getting over that initial hump is tough.
Not that it excuses lying, of course.
My friend has decided he won't go along with lying. They're supposed to present him with his employment contract today, and he intends to find some reason to reject that, so it'll be a situation in which he "quit" rather than getting fired (which apparently happened to one of his coworkers who refused to lie.)