If using SMTP switch to PHPMailer or Sendmail (or try both) then retry. Joomla will fallback if SMTP fails. CB will not and will simply error.
Kyle (Krileon) Community Builder Team Member Before posting on forums:
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I found the fault last night. It was actually the browser (Google Chrome) causing the problem. I had to close all browser windows, Open a new session clear history, Close and reopen to make CB work again.
What i did work out was this. CB was tripping up in the file - administrator/components/com_comprofiler/view/view.users.php - public function startEmailUsers () - It would exit via "error: function( jqXHR, textStatus, errorThrown ) {"
Interestingly there was no "errorThrown" - I assume there should have been.
A note for the developers: This function has 2 possible failure points which both return the same error "Email failed to send" I had to make these different to know which route the code followed before failing. Line 342 and line 350