Bumped into this error when setting Office 365 Relay in my Local SharePoint On-premise server for outgoing email.
I have done the following steps -> http://fmuntean.wordpress.com/2008/10/26/how-to-configure-iis-smtp-server-to-forward-emails-using-a-gmail-account/
Ensure you have done the add SMTP Feature, IIS 6.0 SMTP Virtual Server running.
The below check/config works for me
- Go to your IIS 6.0 and right click SMTP Virtual Server properties.
- In the Server properties, go to “Security” tab and ensure the Service Account (or whatsoever account) that needs to do the mail sending, is added into the operators list.
- That is it! You can refer to my post Powershell script to test SharePoint Send Mail