Internships: how do you deal with students who lie?

I’ve seen multiple students lie on their resumes. Just this week, a 2nd year student told me he claimed to be 3rd year during his first year, got and passed the interview, and got an internship restricted to 3rd years. The company never checked his transcript and never found out. He said this was minor compared to classmates who completely fabricated experience or projects. Another person I know listed a 7mo swe internship that was actually about 15 hours of simple work over one month, and it’s still listed on his Linkedin. It troubles me that honest candidates are disadvantaged due to poor resume and background checks. Especially in the most competitive part of one's career: their first job(s). I’m sure others have seen similar cases, curious to know what happened and how did those people fare?