My phone has a restricted network message

My iphone 4 - bought second hand - has suddenly stoppped making or recieving calls and messages.
I've had it for 4 months and it's on the Orange network, I have a SIM only card and it's been working perfectly fine until 2 days ago.
Now I get a 'network restricted' message and in the 'about' tab it says 'phone not allowed'.
I took it into an EE store and the guy tried my SIM in another phone and the card worked, he said it must be the phone and told me to contact Apple.
Has the phone blocked itself?

Sounds like you're the victum of a common UK scam...buy iPhone with insurance...report it lost/stolen...collect insurance...sell phone to unsuspecting buyer(you)...insurance company requests phone be blacklisted...you're left holding the empty bag.

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