I think you're completely right.

You could say to him... "you know that when other people are around, you put me down?"

Or you could just leave him to making himself look bad.

My dad would interfere in my Business and my brothers Business by telling customers crap and then come back to us with he was just joking, well the customers don't know that so he was banned.

Yes, we have all had those people in our lives and it is hard to believe how hypocritical they are. You are right, he has low self esteem. What to do about it, well you can tell him that you do not appreciate his "jokes" and see how it goes. If he doesn't mend his ways, stop talking to him, just freeze him out. I know that is difficult but have a go, so how it pans out. Sorry that you have to put up with that kind of behaviour.

Definitely low self esteem-had a friend like that-keep him at a distance. Its childlike behavior I have no patience with.

I think you nailed it - low self-esteem. The direct approach works best for me. I don't care what someone else thinks of me and if I piss 'em off because the truth hurts too sad. I would NOT do it in front of others. But just the two of you, and say something like 'Are you so insecure you have this need to put me down when others around?" If you get the sad face response THAT"S when you go "Bullsit!, there was NO need to say . . . " - fill in the blank. But that's just me.

Had the same person and told him no more joking around or I would return the favor. It worked like a charm.