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No. of Recommendations: 9
There are multiple situations that could cause this - not the least of which is your friend has selective memory. As far as I know, the AT&T people told the truth.

I suggest to start dealing with your friend by saying something like - As you probably know, it is not possible to loose anything you purchased or downloaded from the iTunes Store. Next I would point out that by default the iPhone will backup either to iTunes or to iCloud.

Next I would ask, do you know where your iPhone was backing up? User may not have a clue.

At this point, ask your friend if she knows her Apple ID and password. If yes, have her write them down - passwords are CaSe SensiTive.

She will need to know all her email addresses and passwords. She should write those down before starting - just so she doesn't panic and forget them.

The easiest way to recover is to connect the iPhone to a computer by the wire, Open iTunes, click the iPhone in the sidebar of iTunes. (If the Sidebar is not showing, click the word View in the menu across the top of iTunes and from the drop down menu click "Show Sidebar".) Once the iPhone in the Sidebar is selected, click the Restore iPhone button in the top panel of the Window. She will have to agree to some stuff and depending on a lot of things, this as computer people "will take some time" - like hours.

Do Not Stop or unplug until the iPhone is restored!

If she restores from iCloud she will not retain the icon locations. Also she will restore all items she ever installed - both free and purchased. This will include even those apps deleted unless she also deleted the unwanted apps from the appropriate iTunes location.

Music is stored by iTunes on the PC, if it was not purchased from the iTunes store. Such music (and podcasts) will be restored by the first Sync operation after the restore. If a lot of music ribbed from CDs or podcasts exist, the first sync "will take some time", but not likely as long as the iCloud Restore.

The iOS7 manual can be obtained from this page
Page 149 has instructions - it is a good idea to read first and act second.

If she happens to have an iTunes backup, that will be the one selected by the procedure above. If she does not and has only an iCloud backup she will restore from iCloud as far as I know - I have never restored from the iCloud through iTunes, so I can't be certain.

She can connect her iPhone to the charger before she starts to recharge the battery. Not 100% necessary, but a good idea. It is a bad idea to loose power during the middle of a restore - so a charged battery makes that very unlikely.

Needless to say, it would be a good idea to set up a lock number even if she chooses not to lock the phone (which I think is a bad idea). Once the lock number is created, no one can change to a new lock number without know the existing code. And if she does choose not to auto lock, no one change change that without know the lock code. Needless to say, it would be a great ideal to remember the lock code.

She will get a suggestion to create a lock code the first time she opens the iPhone after the restore.

Now after saying all this - I suppose it is possible the iPhone will be restored in a locked condition. If that happens, the only option is to Restore the Phone to Factory new conditions. Here is a link for that procedure

It will be more work, but she still will not loose any items she paid for in the iTunes store -- but she will need to know he AppleID and Password. If she does not know her AppleID and Password, her only hope is the Recovery code. Apple does not have the capability to provide her password.
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