New Iphone 4S - Will not slide, white line appears around it like a box

I bought an Iphone 4S yesterday and when I try unlock it will not allow me. I try to slide across and the box appears around it. If I happen to get it unlocked after pressing for awhile it does the same with any apps I press on. The white link/box appears around the apps.
I have tried to re-boot and that did not work (Using home and sleep button together until the Apple logo appeared)

Make sure Settings > General > Accessibility - Assistive touch is off.

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