Postmaster undeliverable messages

A curious one:

We have an SBS 2003 server running Exchange.  We've started to see sporadic times when we get a vast number of undeliverable messages from postmaster.  No-one has sent to the intended recipients so we concluded that the server was being used to relay spam.  On running a telnet test and checking the smtp connector settings it appears that our server is not an open relay.  So where are these messages coming from?
kwalker25Asked:
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ridCommented:
"Backscatter spam"; undeliverable messages (spam) with a faked from address that happens to belong to your domain. NDRs go to the fake sender. Not much to do. Help avoiding the plague by not sending NDRs and not using autoreply ("out of office"-style).
/RID
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kwalker25Author Commented:
Thanks for this.  It does appear that the Exchange server itself is generating these and sending them to the administrator designated to recieve error messages.  Would this happen with backscatter spam.
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ridCommented:
No, I may have misunderstood; that type of spam actually comes from outside, from the domain/server that creates the NDR. Basically you send a spam message to a vast number of addresses, some fake. When a server detects a non-existent user, it may create an NDR and return the message to the PURPORTED sender. This sender (faked entry!) is perhaps the actual target of the message, that's how it turns out anyway.

Perhaps if you can paste the contents of such a message here, you will get better help.
/RID
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kwalker25Author Commented:
As requested I attach an example email which is coming from an address called postmaster@ourdomain.co.uk.  What mystifies me is that we have no further signs of being used by spammers.

Your message did not reach some or all of the intended recipients.

      Subject:      se'milla
      Sent:      27/01/2008 00:24

The following recipient(s) cannot be reached:

      albertgloria7@pop3.singnet.com.sg on 27/01/2008 00:35
            The e-mail account does not exist at the organization this message was sent to.  Check the e-mail address, or contact the recipient directly to find out the correct address.
            < oxygen.singnet.com.sg #5.1.1 X-Unix; 550 5.1.1 User unknown>
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ridCommented:
You are not being used, you are victims. This message probably has a user in your domain as the fake sender, and it is returned to you because albertgloria7 doesn't exist at singnet.com. If your server is set to create NDRs, and the fake receiver in YOUR domain doesn't exist either, your server tries to return this message in turn. This will of course fail totally and you have a lot of undeliverable NDRs in your outbound queue; possibly those will be having "postmaster" as sender....
/RID
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kwalker25Author Commented:
Great

How do we solve this then.
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ridCommented:
If this is indeed as I suspect, you can't do much about incoming spam of this type. However, you can disable the NDRs in your server. This will eliminate outgoing mail in response to spam to nonexistent users. As these replies often bounce back or just cannot be delivered, they may cause many messages to end up in your outgoing queue. (nondeliverable from postmaster).
/RID
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