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Bounce Back Messages Occurring with Exchange Server 2010 - "Please turn on SMTP Authentication in your mail client, or login to the IMAP/POP3 server before sending your message"

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I have a Microsoft Small Business Server 2011. About four months ago the OWA stopped working and MS Support had to be called to get it fixed since nothing we did resolved the issue. However after the OWA was repaired we started noticing excessive amounts of email bounce backs occurring, but only during a "reply". In otherwords, if we replied to the sender we would get a bounce back, but if we created a new email with the senders address it went through. This is just totally bizzare. Micorosft Support personnel have looked at this sideways and at this time can't resolve the problem. Yes before anyone askes, we have checked our static IP and domain for blacklists, checked reverse DNS and just about everything external imagineable and it all checks out good. The error message which is contained here thinks we are running POP3 email accounts, when in fact all our email goes through an Exchange Server. So the message is really not helpful at all. Here is the most common of the bounce backs:

Please turn on SMTP Authentication in your mail client, or login to the IMAP/POP3 server before sending your message.  [********]:46408 is not permitted to relay through this server without authentication.

A problem occurred during the delivery of this message to this e-mail address. Try sending this message again. If the problem continues, please contact your helpdesk.

Our ISP as well as other IT folks have looked at this and are puzzled, if you Google the error you get tons of crap that has nothing to do with Exchange Services, but most reference POP3. We have POP3 and IMAP turned off we don't use a Smart Host and everything was fairly fine until the OWA issue occurred.

Everyone I've talked to so far has no clue. I can't be the only one in the known Exchange universe that has run into this before? Any one have any ideas?


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