diff --git a/servers/rest_server/includes/RESTServer.inc b/servers/rest_server/includes/RESTServer.inc
index c49ed6a..e8c15fb 100755
--- a/servers/rest_server/includes/RESTServer.inc
+++ b/servers/rest_server/includes/RESTServer.inc
@@ -152,9 +152,7 @@ class RESTServer {
       $result = services_controller_execute($controller, $arguments, $options);
     }
     catch (ServicesException $e) {
-      $errors = $this->handleException($e);
-      drupal_alter('rest_server_execute_errors', $errors, $controller, $arguments);
-      $result = $errors;
+      $result = $this->handleException($e);
     }
     $formatter = $formats[$response_format];
 
@@ -515,7 +513,7 @@ class RESTServer {
 			}
 		}
 		else {
-		  // else, simply create an array where the key is name of the element		
+      // else, simply create an array where the key is name of the element
 		  $new_array = self::unmarshalXML($child, $array[$child->getName()]);
 		}
 		// add $new_array to $array
@@ -683,37 +681,48 @@ class RESTServer {
   }
 
   function handleException($exception){
-    $code = $exception->getCode();
-    switch ($code) {
+    $error_code = $exception->getCode();
+    $error_message = $exception->getMessage();
+    $error_data = method_exists($exception, 'getData') ? $exception->getData() : '';
+
+    switch ($error_code) {
       case 204:
-        drupal_add_http_header('Status', '204 No Content: ' . $exception->getMessage());
+        $error_header_status_message = '204 No Content: ' . $error_message;
         break;
       case 304:
-        drupal_add_http_header('Status', '304 Not Modified: ' . $exception->getMessage());
+        $error_header_status_message =  '304 Not Modified: ' . $error_message;
         break;
       case 401:
-        drupal_add_http_header('Status', '401 Unauthorized: ' . $exception->getMessage());
+        $error_header_status_message =  '401 Unauthorized: ' . $error_message;
         break;
       case 404:
-        drupal_add_http_header('Status', '404 Not found: ' . $exception->getMessage());
+        $error_header_status_message =  '404 Not found: ' . $error_message;
         break;
       case 406:
-        drupal_add_http_header('Status', '406 Not Acceptable: ' . $exception->getMessage());
+        $error_header_status_message = '406 Not Acceptable: ' . $error_message;
         break;
       default:
-        if ($code >= 400 && $code < 600) {
-          drupal_add_http_header('Status', $code . ':' . $exception->getMessage());
+        if ($error_code >= 400 && $error_code < 600) {
+          $error_header_status_message = $error_code . ':' . $error_message;
         }
         else {
-          drupal_add_http_header('Status', '500 Internal Server Error: '. 'An error occurred (' . $code . '):' . $exception->getMessage());
+          $error_header_status_message = '500 Internal Server Error: An error occurred (' . $error_code . '): ' . $error_message;
         }
         break;
     }
-    if($this->endpoint->debug) {
+
+    $error_alter_array = array(
+      'code' => $error_code,
+      'header_message' => &$error_header_status_message,
+      'body_data' => &$error_data,
+    );
+    drupal_alter('rest_server_execute_errors', $error_alter_array, $controller, $arguments);
+
+    drupal_add_http_header('Status', $error_header_status_message);
+    if ($this->endpoint->debug) {
       debug($exception);
     }
-    if(method_exists($exception,'getData')){
-      return $exception->getData();
-    }
+
+    return $error_data;
   }
 }
diff --git a/servers/rest_server/rest_server.api.php b/servers/rest_server/rest_server.api.php
index a72f717..a3b970a 100644
--- a/servers/rest_server/rest_server.api.php
+++ b/servers/rest_server/rest_server.api.php
@@ -65,10 +65,21 @@ function hook_rest_server_response_formatters_alter(&$formatters) {
  * Alter error messages right before delivering.
  *
  * @param array $errors
- *  Array of errors to be delivered.
+ *  Array of following properties:
+ *   'code' -- error code
+ *   'header_message' -- message that will be returned in Status header
+ *   'body_data' -- data returned in the body of the response
+ *  You can alter 'header_message' and 'body_data' in your hook implementations.
  * @param type $controller
  *  Executed controller.
  * @param type $arguments
  *  Arguments of the controller.
  */
-function hook_rest_server_execute_errors_alter(&$errors, $controller, $arguments) {}
+function hook_rest_server_execute_errors_alter(&$error, $controller, $arguments) {
+  $error_code = $error['code'];
+  if (user_is_logged_in() && $error_code == 401) {
+    global $user;
+    $error['header_message'] = '403 ' . t('Access denied for user @user',
+      array('@user' => $user->name));
+  }
+}