Unclear calls using wired headset iphone 5

With my new iPhone 5, if I make calls using my headset (the standard wired one that came with the phone or another) then I cannot hear the other person properly.

It is not the volume; it is like the other person is muffled or there is poor reception; their voice simply does not come through properly. I often miss the start or the end of their words – often entire words (often whole phrases) don't come through at all.

Its only when using wired headset, using the iPhone alone there is no problem, perfect calls. Listening to music or podcast is also flawless using headset, so it dosent seem like a hardware problem to me. It's only when making calls.

Anyone else expericing this problem?