Thanks for your time and patience. I was able to test this with Gmail and got authentication error as "SMTP AUTH" is disabled in your tenant, The issue was fixed after enabling Authenticated SMTP.
In your tenant kindly validate the following :
- If Authenticated SMTP is enabled for your impacted user (this setting does over ride tenant configuration)
- Navigate to https://admin.microsoft.com/Adminportal/Home?source=applauncher#/users
- Select the user you are testing this with.
- Ensure "Authenticated SMTP" is checked.
- Please ensure to uncheck "Turn off SMTP AUTH protocol for your organization" by navigating to https://admin.exchange.microsoft.com/#/settings
- Please validate if security defaults has been disabled in your organization.
- If your authentication policy disables basic authentication for SMTP, clients cannot use the SMTP AUTH protocol even if you enable the settings outlined in this article. For more information, see Disable Basic authentication in Exchange Online.
Thanks,
Akshay Kaushik
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