I bought a 2nd hand Iphone 4 on ebay which was advertised as 'unlocked' but when I put in my sim it says "Only compatible SIM cards from a supported Carrier may be used." Does this mean it is not unlocked?

You got screwed, your phone is locked to whatever the carrier was used by the seller. Only that carier can unlock your phone.

You got lied to. It is not unlocked.

ONLY the carrier it is LOCKED TO can authorize unlocking it. You will have to find out who that is and ask them what their unlocking policy is. YOUR network can NOT legitimately unlock your phone. If they try to tell you to go down the street to a cell phone shop to have it unlocked, DO NOT DO IT.

Your best option at this point would actually be to file a claim with ebay that the phone is not as advertised and return it for a refund. Then you can use the money to purchase one from a LEGITIMATE AUTHORIZED source.

Buying from eBay is never normally a good idea as usually they are advertised as unlocked when infact they are either locked or hacked. It's sounds as though you have bought a locked iPhone and only the carrier to which it is locked to can unlock it, and only if they support unlocking. In any case you would neeed to establish service with them first for a period of time before you could request unlocking. However, as I said not all carriers offer authorise unlocking under any circumstances.

I would go to an Apple Retail Store ,Genius Bar,or call Apple Support in your country and they may tell who the iPhone is locked to and then you can tackle seeing whether it can be unlocked

You don't say which country you are in which makes it a little more difficult to give you specific information

Hi

Did you buy from a USA Seller on ebay? if you did I guess its LOCKED TO AT&T

evryone knows about this but this is a actual ongoing thing they do not I say

DO NOT UNLOCK THERE iPHONES

however I suggest you contact your seller and findout where they had this iphone from

if it is a UK iPhone then your in luck as those can be unlocked by the 5 networks

alot of ebay sellers also claim phones are unlocked but they have taken steps to unlock the phones

if you update the phone on iTunes you loose this privalege

btw if your phone is a AT&T handset your option is only to sell it back to a american buyer

best of luck 😉