Custom object does not create a separate record, it just updates an existing object.
Be sure you have a de-duplication field setup on the custom object. If you have a de-dupe field enabled and on the object, be sure that the value for the de-dupe field is unique.
Examples of good unique values:
- VIN #
- a serial number
- any trait unique to the record/object
Examples of bad field types:
- Product model #s
- Other traits shared by multiple records