Terry said:
SMTP is enabled, that is why I do not understand why I'm getting the error
Enabled? That merely means you have an SMTP server defined so that
e-mail account can use it. Authentication means you have to enable THAT
option. The default for SMTP authentication is to reuse the login
credentials for the POP server access. Try selecting to use different
login credentials but specify whatever are the correct ones (which may
be the same as the POP login).
The "error" to which you refer is actually an e-mail. In the headers of
that NDR (non-delivery report) e-mail, who is sending it to you? Does
it come from your own sending mail host? Or was it sent by the
receiving mail host?
Are you running your own SMTP server and trying to send e-mail through
that (and then onto your ISP's SMTP server)? Or is Outlook connecting
directly to the ISP's SMTP server?
Have you yet tried disabling e-mail scanning in your anti-virus program?
Some behave as a transparent SMTP server to intercept your e-mails,
interrogate them, and then send them to the real SMTP server.