diff --git a/lib/daemon.js b/lib/daemon.js
index a287eb7..6aee256 100644
--- a/lib/daemon.js
+++ b/lib/daemon.js
@@ -92,9 +92,15 @@ function DaemonInterface(options){
 
                     }
                     catch(e){
-                        parsingError = e;
-                        _this.emit('error', 'could not parse rpc data from method: ' + method +
-                            ' on instance ' + instance.index + ' data: ' + data);
+                        if (res.statusCode === 401){
+                            parsingError = 'unauthorized';
+                            _this.emit('error', 'Invalid RPC username or password');
+                        }
+                        else{
+                            parsingError = e;
+                            _this.emit('error', 'could not parse rpc data from method: ' + method +
+                                ' on instance ' + instance.index + ' data: ' + data);
+                        }
                     }
                     if (typeof(dataJson) !== 'undefined')
                         itemFinished(dataJson.error, dataJson.result);