1) It occurs if the mail is sent to non-existing user.
2) We also get this error if we have Set default email address to Discard with error to sender (at SMTP time) and added the message as No Such User Here.
In this case we can just remove the above option and set default email address to Forward to email address which means any email sent to xyz.com will be forwarded to the email address mentioned there.
To avoid spam we usually set default email address to Discard with error to sender (at SMTP time).
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Carol.P
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