diff --git a/scripts/tests/faction.lua b/scripts/tests/faction.lua
index 38fdc4eb7..87a6b5100 100644
--- a/scripts/tests/faction.lua
+++ b/scripts/tests/faction.lua
@@ -17,7 +17,7 @@ function setup()
 end
 
 function test_faction_flags()
-    assert_equal(2, f.flags) -- FFL_ISNEW
+    assert_equal(6, f.flags) -- FFL_ISNEW|FFL_PWMSG
     f.flags = 42
     assert_equal(42, f.flags)
 end
diff --git a/src/kernel/faction.c b/src/kernel/faction.c
index d67619752..6b601f002 100755
--- a/src/kernel/faction.c
+++ b/src/kernel/faction.c
@@ -247,11 +247,6 @@ faction *addfaction(const char *email, const char *password,
         log_warning("Invalid email address for faction %s: %s\n", itoa36(f->no), email);
     }
 
-    if (!password) password = itoa36(rng_int());
-    faction_setpassword(f, password_encode(password, PASSWORD_DEFAULT));
-    ADDMSG(&f->msgs, msg_message("changepasswd", "value", password));
-    f->flags |= FFL_PWMSG;
-
     f->alliance_joindate = turn;
     f->lastorders = turn;
     f->_alive = true;
@@ -260,7 +255,11 @@ faction *addfaction(const char *email, const char *password,
     f->magiegebiet = 0;
     f->locale = loc;
     f->subscription = subscription;
-    f->flags = FFL_ISNEW;
+    f->flags = FFL_ISNEW|FFL_PWMSG;
+
+    if (!password) password = itoa36(rng_int());
+    faction_setpassword(f, password_encode(password, PASSWORD_DEFAULT));
+    ADDMSG(&f->msgs, msg_message("changepasswd", "value", password));
 
     f->options =
         want(O_REPORT) | want(O_ZUGVORLAGE) | want(O_COMPUTER) | want(O_COMPRESS) |
diff --git a/src/kernel/faction.test.c b/src/kernel/faction.test.c
index 3d81b5d3c..441ca5038 100644
--- a/src/kernel/faction.test.c
+++ b/src/kernel/faction.test.c
@@ -117,7 +117,7 @@ static void test_addfaction(CuTest *tc) {
     CuAssertTrue(tc, checkpasswd(f, "hurrdurr"));
     CuAssertPtrEquals(tc, (void *)lang, (void *)f->locale);
     CuAssertIntEquals(tc, 1234, f->subscription);
-    CuAssertIntEquals(tc, FFL_ISNEW, f->flags);
+    CuAssertIntEquals(tc, FFL_ISNEW|FFL_PWMSG, f->flags);
     CuAssertIntEquals(tc, 0, f->age);
     CuAssertTrue(tc, faction_alive(f));
     CuAssertIntEquals(tc, M_GRAY, f->magiegebiet);
diff --git a/src/reports.test.c b/src/reports.test.c
index 389d9c130..728145758 100644
--- a/src/reports.test.c
+++ b/src/reports.test.c
@@ -232,7 +232,7 @@ static void test_newbie_password_message(CuTest *tc) {
     test_setup();
     f = test_create_faction(0);
     f->age = 5;
-    CuAssertIntEquals(tc, 0, f->flags&FFL_PWMSG);
+    f->flags = 0;
     prepare_report(&ctx, f);
     CuAssertIntEquals(tc, 0, f->flags&FFL_PWMSG);
     CuAssertPtrEquals(tc, 0, test_find_messagetype(f->msgs, "changepasswd"));