The 550 5.1.8 Access denied, bad outbound sender NDR (Non-Delivery Report) error in Microsoft Office 365 or Exchange indicates that the recipient’s mail server rejected your email due to issues with the sender’s email address, domain, or server configuration. This is typically a hard bounce caused by authentication failures, poor sender reputation, or restrictive recipient server policies.
The full Non-Delivery Report (NDR) error message is as follows:
This NDR is generated if a user tries to send an email message after their account exceeds the sending limits in Exchange Online.
If you're a user, determine whether your account is compromised and then notify your administrator.
If you're an email administrator, follow these steps:
Unblock the user account on the Restricted entities page in the Microsoft 365 Defender portal. After you unblock the user account, all restrictions are usually removed within one hour so that the user can send email.
For more information, see Remove blocked users from the Restricted entities page. To help prevent future account compromises, follow the recommendations in Top 10 ways to secure your business data.