When sending mail, the error message "550 Relay Denied" is given by the SMTP server and mail cannot go out.
Most Internet Service Providers restrict access to their outgoing mail servers to prevent SPAM from being sent through their mail servers. If you are getting the "550 Relay Denied" error message, the outgoing mail server cannot verify who you are and will not allow you to send mail.
Mail Relay is when you connect to a mail server on another domain and try to send mail. For example, if you are connected to the internet through 123-connect and then try to send mail using different mail server. In the past, mail relaying was fine - SMTP servers did not check to see who was sending the mail and would simply pass the mail on. But unsolicited bulk mailers or SPAMMERS have taken advantage of this to send huge volumes of mail with fraudulent return addresses, which slows down the server for the paying customers who have the right to use it and slows down servers everywhere with all that junk mail.
One of the ways to restrict access to an outgoing mail server is to verify that the computer is on the ISP's local network. When you dial your modem and connect to your ISP, your computer is given an IP address that identifies you as being a part of that ISP's network. If you have two ISP's and dial up to one and then connect to the other's mail server, it may prevent you from relaying mail because your computer is not identified as being on the local network for the provider whose mail server you are sending through.
Example: If you connect to the internet with 123-connect and try to send mail using BT mail server, you will get a 550 error. To fix this, you should try to use the SMTP server for the provider you have used to dial up and connect to the Internet.