People across regional Australia are selling a curious Japanese machine that “electrolyses” tap water and promises “triple health” for the drinker.
Proponents of the multi-level marketing scheme promise six-figure salaries but most recruits never make a profit. Many more are ending up in serious debt.
It’s late at night when Kate*, a single mum from outback Queensland, sees a post pop up in her social feed.
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There’s a young woman in a cowboy hat, claiming to live a lavish life with money made from a new scheme, that’s “a little bit different”
Eager to find out more, Kate joins the private Facebook group tied to the scheme.
Twelve thousand members strong, it’s called the Rural Freedom Movement – and is described as a “community of rural people who are seeking to learn how to create an online income and build a legacy for their future.”
Pinned to the top of the page is a video of the same woman. The group’s founder, Kylie Stevenson.
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“If you’re looking for an opportunity to break free from the traditional 9-5 grind and create a life of financial freedom,” the post said, “then you’re in the right place”.
“I think that was what got me,” Kate says.
“I was always trying to find a way to make money as a mum. I’d tried every MLM (multi-level marketing) known to man.
“I’m like, right, so I need to look bigger than Tupperware.”
She scrolled through the stream of positive content.
Everyday rural women, promised “personal growth” and an avenue to “follow your dreams” in short video sermons.
Kylie was talking about making serious money.
Ten thousand dollars a month. A hundred thousand dollars a month.
“You’ve got a young sheila, living her best life, floating around, camp drafting, flash car, flash horses, just working for herself at a young age,” Kate remembers thinking.
“Who wouldn’t want to do what she’s doing?
“I was pretty much sucked into it.”
Multi-level marketing schemes involve individuals directly selling products, usually by leveraging social networks. People earn commissions from both the sales they make and the sales made by others they recruit. Think Amway and Tupperware.
In Kate’s case, she’d signed up to sell water.
More specifically, a Kangen alkaline water ionizer and filtration machine.
The devices are distributed by a 50-year-old Japanese direct-sales company called Enagic, which describes it as an “antioxidant machine”.
“Our passion is to transform the tap water in your home into pure healthy electrolyzed-reduced and hydrogen-rich drinking water,” the company states on its website.
So far, there is little scientific evidence that the machine’s alkaline water has any health benefits.
Kate was quickly funnelled into the Enagic universe and encouraged to sign up.
For roughly $6,500 she bought a Kangen 8 water ioniser, and a box of wild turmeric capsules, known as Ukon.
In regular live “masterclasses” inside the Rural Freedom Movement group, members are encouraged to buy more than one machine, so they ‘skip the queue’ in a complex commission structure designed by the company.
Kate didn’t have spare money, and was worried about her credit rating, but she says supporters of the Rural Freedom Movement told her about a payment plan she could access directly through Enagic, who offer finance to buy their products.
Publicly available information online reveals if individuals fail to make payments in the time frame, the 10 per cent per annum interest rate jumps to 25 per cent.
Despite repeated attempts to get information from the company about these loans, they declined to respond.
The network Kate joined also recommends loans through a payday lender, Ausloans in Strathalbyn, South Australia, which advertises unsecured personal loans that can attract very high interest rates.
The owner of Ausloans Strathalbyn is also an Enagic distributor.
Ausloans Strathalbyn failed to respond to requests for comment.
In the end, Kate borrowed directly from Enagic.
When Kate bought the product, she received a distributor number.
She was in. All she needed to do to make her money back, and repay her loan, was to start making sales and recruit other distributors — then they would be in her ‘downline’ and start kicking up commissions.
“They sell it in a way that you will make the money back to pay for this loan, this is an investment,” Kate says.
“You just have to sell this many and you’ll have it paid off within two months. And you know, you’re in that headspace.”
Secrets to success
The way the scheme works is meant to be simple.
The more salespeople you sign up, the more sales you and your team will make.
The higher you rise through the ranks, the more commission you get.
But while promises of six-figure incomes and legacy payments abound, Enagic’s own “efriends” newsletter makes it clear that only a handful will ever reach this level — with only one or two of the thousands of Enagic sellers in Australia making the list each month.
Income disclosures for Enagic in the US also show very few individuals make significant income from selling the devices.
Ninety-nine per cent of participants there make less than $US14,000 ($21,000) per year, and 60 per cent make a median income of $285 per year. This doesn’t include what people have spent on products or sales “coaching”.
The Rural Freedom Movement and its disciples preach that “six-figure” monthly incomes are attainable to anyone who tries hard enough and follows their plan.
Because Enagic does not release income disclosures in Australia, there is no data available on actual earnings here.
As time went on, Kate began to learn that it was not all about selling water ionisers.
“They’re like, you’ve got to put yourself out there,” she said.
“Basically, selling yourself and your life, not really the product.”
She was told to subscribe to a website offering coaching that would be key to her success.
It’s called The Freedom Era, and it’s run by the top Enagic sellers in Australia. The creator of the Rural Freedom Movement is in their “downline” and kicks commissions up to them.
Kate began having second thoughts.
“I was feeling like a dick, I didn’t want to put this on my Facebook,” Kate said.
But she was $6,500 in debt, so she watched The Freedom Era “masterclasses” and tried to remake herself on social media to generate interest and sales.
The Freedom Era
It costs $99 per month to access The Freedom Era training resources, which promise to impart the secrets to affiliate marketing success.
“We are dedicated to the continual uplevelling of YOU, our family,” the website states.
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“The Freedom Era is a home for those who are tired of giving their life force to building someone else’s dream.
“Shatter the constructs of hustle, burnout, unfulfillment and scarcity to recreate a new world where we all rise and thrive together!”
Kate said the site provided detailed instructions.
“On Monday, do a post about travelling,” she recalls.
“On Tuesday do a post about your family, on Wednesday do an inspirational quote, on Thursday, blah, blah blah.”
The ABC has independently accessed the subscription-only site, to get a first-hand look at the playbook of the multi-level marketing machine.
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In one section, subscribers are provided with a “seven step script template” to deal with potential recruits.
They’re instructed to “build (a) connection” with individuals online.
“Add her as a friend on your personal page”, it instructs.
“Love heart her comment and follow the scripts below.”
There’s a series of scripted chat message templates to send to “leads” interested in joining the scheme.
Hey babe! How are you? Thank you for your message!
I am so grateful to be in the online space and to create FREEDOM, TIME & WEALTH for my family!
I would love to share the steps I have taken and many others to create a multiple 6 figure business online, what has made you reach out today?
One chat message template refers to an invented boyfriend, “Justin”, who has “retired” from the mines because of the seller’s MLM success.
Awesome! Thank you for sharing this with me!
I totally relate, having retired Justin last year from the mines, I understand how hard it feels when you are sacrificing your time for money.
I would love to share more info with you on how I have been able to change my life, when do you think you will have some time to watch a quick video?
I’m so excited to be able to connect with you and guide you to create life on your terms!
Another describes the business as going beyond “traditional sales”.
Hey babe, I’m sure you loved the video, it can be a little confusing what we do online because it’s not traditional sales!
We focus on building our personal brand, so taking people on the journey to create more freedom by sharing our values & lifestyle and we leverage the platform for all of the education, learning, support, sales & paperwork!
A lot of the business is automated, so our job is literally crafting content for social media (we will teach you this skill)
So many people go on a beautiful personal development journey in our community too!
In case you are needing a little more time or more info, here is our link to our exclusive group!
Kate joined The Freedom Era and downloaded the resources.
“I printed everything out, I had a folder and I was following it,” she says.
But still, there were no ‘leads’.
“I was starting to see that this isn’t as easy as they’re making it out to be,” Kate says.
So she reached out to her mentor and founder of The Rural Freedom Movement, Kylie Stevenson, for guidance.
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The self-appointed “branding expert” was the woman who appeared on the back of the ute, in the post that first got Kate interested.
Kylie has claimed on her social media accounts that she joined The Freedom Era several years ago and has risen through the ranks of Enagic ever since.
In 2023 she told followers she was on track to receive “5,000 USD every month for the rest of [her] life” through “legacy” payments.
Her Instagram page is littered with testimonials from women in rural Australia, who sing her praises as a mentor.
“Having Kylie there, in front of us, paving the way…helped me so much in realising I’m where I need to be, it’s okay, she’s got us,” one follower says.
“If you want magic in your life, look no further,” says another.
Kate’s experience was different.
“There were quite a few times where I’d just send her a message, (saying) look this isn’t working,” Kate said.
“And it was more, you’re not doing the work, that’s why it’s not working.”
Kate persisted. But even when she eventually had people interested in signing up, she hit another hurdle – her conscience.
“I just couldn’t do that to anybody else, I wasn’t going to see somebody else go into debt,” she says.
The ABC contacted Kylie Stevenson for a response, but she declined to comment.
We sent through a series of questions about the business structure and earnings data, and whether it was reasonable to suggest to individuals getting involved that they could soon be earning $50,000 a month.
She did not respond to the questions and advised she was getting her lawyer involved.
Kristie and the Rich Mystic Man
Kylie is a relative lieutenant compared with Kristie Ord and her husband Clint Morgan, two of Australia’s biggest Enagic distributors.
Alongside Rebekah Femia, Kristie and Clint are the “executive team” behind The Freedom Era website that new recruits like Kate are directed to join.
In a video available to paid subscribers, Kristie describes her own decision to leave her corporate job, living pay cheque to pay cheque, to create a life she had “only ever dreamt about”.
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Rebekah and Kristie seem certain that anything is possible.
“The system as we know it … wasn’t truly designed for us to actually thrive.
“If you’re here,” she says, “you are a freedom seeker.”
“You are going to learn all the tools to actually create a personal brand so you can be paid to be yourself.
“It doesn’t matter where you’re at in your journey, it doesn’t matter how much debt you have. It doesn’t matter what’s happened in your life,” she says.
Kristie and Clint have thousands of people in their “downline”, and claim to have made millions in sales.
Through The Freedom Era website, they share sales tactics, templates for emails and social media posts, and even a chatbot to “bring your ad copy back into compliance.”
Neither Clint or Kristie are listed on The Freedom Era’s business records through ASIC.
A man from Wallabadah in rural New South Wales is listed as the director of a business called “The Freedom Era”— but he told the ABC he was not interested in speaking and had nothing to do with it anymore. His partner is an Enagic distributor.
In the fine print of privacy policy on The Freedom Era website, it says “this policy and the use of this Site are governed by Cypress law”.
Cyprus is a known tax haven, and a search of government records there reveals a company called “The Freedom Education Era Ltd”, with Balazs Kardos, the world’s number one Enagic salesperson, listed as a Director.
Mr Kardos refers to Clint Morgan as a “really close friend and a business partner.”
Neither Mr Kardos nor Mr Morgan have responded to requests for comment.
When the ABC contacted Ms Ord, she told the reporter to contact Enagic directly.
“Do not harass us,” she said.
When we sent detailed questions to Enagic’s representative, they said:
“Although all media enquiries are to be directed to Enagic, and not to its distributors, interviews are not conducted.
“We do not know the basis for your story or interest in Enagic or its distributors. However, Enagic does not support or participate in media coverage of that nature and reserves all its rights in that regard.”
The ABC reached out to more than 30 current and former distributors connected to the Rural Freedom Movement who had signed up to sell the water machines.
Most did not respond.
The few who did said they were “not interested”, or that it was “a long time ago” and they didn’t have anything to do with the scheme anymore. None of those who did respond had made their money back.
The ABC has found dozens of Facebook groups akin to The Rural Freedom Movement that lie dormant and unused, all using the language taught in the playbooks.
The groups link to websites that are now defunct.
MLM or illegal pyramid scheme?
Multi-level marketing, also known as direct selling or network marketing, involves selling products through personal networks and recruiting other sellers.
“You get paid not just for what you sell, but you get a commission on the sales of people who you’ve recruited into the organisation,” said Professor Deanna Grant-Smith, University of the Sunshine Coast.
She has profiled and studied MLMs in Australia and said MLMs aren’t illegal, and some people do make lots of money.
“That legal definition is all around the fact that it is about the sale of a product or service. So it’s not just paying to enter,” Professor Grant-Smith says..
“There are incentives baked into the way that you earn your money by bringing more people into the organisation.”
The Freedom Era business is focused on bringing in more distributors, not directly selling machines.
And the ‘indirect marketing tactic’ is all about living the freedom dream, a laptop lifestyle where you get out what you put in and do away with the 9 to 5 grind.
The question of whether an MLM reaches the level of a pyramid scheme — which is an unlawful strategy of making money by recruiting infinite investors — is in the ability to make genuine sales from the product in question.
Because income disclosures are not available in Australia for Enagic, it’s impossible to say.
“There’s some research that was done in the United States that suggests that 99 per cent of people make no profit through multi-level marketing,” Professor Grant-Smith says.
“We also found that not only were people not making money, they were typically not factoring in all of their expenses into the judgements they were making about how much money they were making.”
According to the US Federal Trade Commission, as little as less than one per cent of MLM participants end up making a profit.
“MLM makes even gambling look like a safe bet in comparison,” the report says.
The Australian Competition and Consumer Commission has a similar warning.
“While MLM schemes are legal, unfortunately in the vast majority of cases, the only people who make money from them are the creators,” a spokesperson says.
The CEO of the Consumer Action Law centre, Stephanie Tonkin says that the difference between an MLM and a pyramid scheme can be hard to distinguish.
“I find it very difficult myself to identify the difference,” she said.
“Multi-level marketing schemes are legal but it’s a fine line between [those and] a pyramid scheme.”
Kate is still paying off her debt to Enagic.
The water machine is in a box, and she just threw out the unopened boxes of wild turmeric capsules.
“I wanted something serious that was going to help me,” says former Enagic distributor Kate.
“But yeah, it didn’t sort of work that well.”
*Name has been changed
Credits:
Reporters: Nathan Morris and Andy Burns
Story editor: Charlotte King
Illustrations: Lindsay Dunbar
Digital production: Nathan Morris
Source: Thousands of people are being funnelled into a multi-level marketing scheme promising
