A few things could be attributing to this error.
in no particular order, try these:
When configuring Universal Email, some mail servers will have issues if you set a From Display name. Try leaving that blank.
Some SMTP servers will refuse to relay if the from address is not on the same domain, set the from address to a valid address on the same domain as the SMTP server.
In the mail server section, check the option to send the from address as an additional parameter.
if your still having the issue, you should check with the host It may be that the to address you are using to test with has been black listed.
also, make sure you are using the correct smtp server for your domain, if you are using an smtp server for another domain, you may get this error.
Finaly, there may be an issue with the dns record for the smtp server.