“Email Spoofing ” is when someone inserts your email address as the “reply to” email address in an email. Because this field is not validated, any user can put any address they choose in this field. This will give the recipient the impression that the mail has come from your email address, but in actuality it did not.

If you receive bounce messages for mail that appears to originate from your account, you find messages in Spam from ‘me,’ or you receive a reply to a message you never sent, you may be the victim of a ‘spoofing’ attack. Spoofing means faking the return address on outgoing mail to hide the true origin of the message.

Has my account been compromised?
So, to elaborate further, If you’ve received a reply to a message that wasn’t sent from your address, there are two possibilities:

The message was spoofed, forging your address as the sender OR
The original sender used your address as a reply-to address so that responses would be sent to you.

Neither of these possibilities indicates that your account was compromised.

What should I do if I receive or am notified about a spoofed email?
Unfortunately, there is no real prevention of this because of how easy it is to “spoof” someone’s email address. Your domain may have been a target, but at the same time you may be a random victim of someone who is playing a prank. The only solution is such cases is to wait out the attack.

Why do attackers spoof emails?
To pretend to be someone the recipient of the email knows and use the confidence to ask for sensitive information auch as login details for banks etc, or simply ask funds to be transferred to another bank account.
To flood the victims mail box with hundreds of bounce back messages and cause disruptions in business activity.