iPhone 5S locked out

Hello!

I bought a phone from a family member - they didn't know how to remove activation lock - however they managed to do this after declaring the phone lost (also erasing the device). On iTunes, it says that the phone is now deactivated and should be fine to use (sign in with my regular credentials), although when starting with the phone from scratch, i get stuck on the 'Quick Start' menu where I cannot click 'Set up manually'. Please could I have some assistance on this?

Thanks,

Archie