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Client does not have permissions to send as this sender

I am getting the follow NDR back from the System Administrator(See Below). This happens In all cases, locally from within the network, Outlook Web access or RDP over HTTPS. I have two domains setup. One works correctly and the other doesn't. I have read many other posts regarding these errors and have tried many things but haven't been able to solve it yet. One other thing to note is that on the second domain I have setup separate user names that only contain the SMTP address for that domain. Not sure it makes any difference. I route all mail though the same SMTP connector that Forwards all mail to the ISP. Eventually I would like to split the outgoing mail to the 2 appropriate isp's for legal reasons. I have tried using my mail server for the outgoing smart host as well because I know it doesn't reject email using a different sender.

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

Subject: test1015
Sent: 4/17/2009 10:15 AM

The following recipient(s) could not be reached:

  dave@montanaservers.com on 4/17/2009 10:15 AM
  You do not have permission to send to this recipient. For assistance, contact your system administrator.
  <rich4evr.com #5.7.1 smtp;550 5.7.1 Client does not have permissions to send as this sender>
1 Solution
I don't think that is an Exchange message. That is being generated elsewhere.

Oh and Exchange cannot route email based on the sender, it only routes based on the recipient. You would need two separate servers to route based on the sender.

itmtAuthor Commented:
The sad things is that exchange does produce this error message that was being caused by the ISP-SMTP server rejecting the recipient. It does not produce it exactly. In hind sight I should have tried to test the SMTP connection via telnet.

Thanks for pointing me in the right direction.

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