I was having this same problem listen to these instructions step by step.
Have your phone plugged in with iTunes.
Turn your phone off.
When it is off, hold the lockscreen, while holding that wait til the logo shows up, then continue holding that and hold the home button. When the apple logo dissapears, let go of the lock screen, and wait 10 seconds while still holding the home screen, then follow the prompt on iTunes. And boom, factory settings. Took me a while to figure out, I had to pull some old knowledge about jailbreaking to figure it out. Don't worry it is completely safe, I was having the same problems as you guys. This will work :)