SMTP Temporary local problem

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Hey,
Not sure if posted in the right forum, but here goes:

Using C5.7.4.1
On hosted server with Cpanel (hosted by Meebox.net)

When I set up SMTP with our SMTP server, and send the test mail it gives the error

"The following error was found while trying to send the test email:
Temporary local problem - please try later"

I have tested the exact same settings with the PHPMailer library, on the same server (as a separate script), and it works fine.

Does anyone have any idea why this is (or just an idea of shy this could happen), or have experienced the same problem?
Any help is appreciated!

Thanks!