Updating contacts but not customer records from online form

I have a client who has an online form to capture leads, etc. They have the form set up to "update the first record created", however they DO NOT want any of the customer record fields overwritten (only contacts to be added). All customer records are 'company' by default. So when a new lead comes in from an existing company, they don't want the hassle of creating a new record and then managing via duplication tool. They want the contact to be added to the company (hence the 'update the first record created' setting). However, by setting this, things like