iPhone 5 screen bulge

My iphone 5 has recently developed a bulge on the left hand side of the screen just above the volume buttons. I have taken it into the apple store who said they believe it to be the battery expanding but as the phone is one month outside of warranty they will not replace. Then told me to contact my service provider, which I have done and they have sent me back to apple. Any suggestions? I don't think its fair that I should have to pay to repair a faulty item as I would expect an item of this cost to last much longer than 13 months. Anyone know if I'm covered under the sales of goods act?

The screen bulge is causing some other problems as well:

Phone turns off randomly

Touch screen is very temperamental

Freezing

Any input would be highly appreciated.