There isn't a reset. You can upgrade to the latest release from ZTE. You'll find the update tool here: UK - ZTE Corporation
(assuming you're in th UK)
Connect your phone via USB to your PC. The phone has to be in FTM mode. NOTE: You will lose everything on the phone, this will be wipe and start again.
Sounds to me though that the phone is faulty. It could be faulty software. But I wouldn't waste my time with it. Send it back.