How do I swipe out all information from iPhone?

My son was given a phone that my sister had bought from an individual. He was using the phone and just one day this appeared on the screen:

Activate iPhone ---- The iPhone was lost and erased. Sign in with the Apple ID that was used to erase this iPhone.

I contacted my sister to get in touch with the individual she bought the phone from, and she did. The individual stated that they didn't remember the password or even began to know what the password was.

How can I reset this iPhone? I know that you can do a hard reset, or erase all the information, or clear it or something. PLEASE HELP!!!