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Folks throughout regional Australia are promoting a curious Japanese machine that “electrolyses” faucet water and guarantees “triple well being” for the drinker.
Proponents of the multi-level advertising scheme promise six-figure salaries however most recruits by no means make a revenue. Many extra are ending up in critical debt.
It’s late at evening when Kate*, a single mum from outback Queensland, sees a publish pop up in her social feed.
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There’s a younger girl in a cowboy hat, claiming to dwell a lavish life with cash created from a brand new scheme, that’s “slightly bit completely different”
Keen to search out out extra, Kate joins the personal Fb group tied to the scheme.
Twelve thousand members sturdy, it’s known as the Rural Freedom Motion – and is described as a “neighborhood of rural people who find themselves searching for to learn to create an internet earnings and construct a legacy for his or her future.”
Pinned to the highest of the web page is a video of the identical girl. The group’s founder, Kylie Stevenson.
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“Should you’re in search of a possibility to interrupt free from the standard 9-5 grind and create a lifetime of monetary freedom,” the publish mentioned, “then you definately’re in the proper place”.
“I feel that was what received me,” Kate says.
“I used to be at all times looking for a approach to generate profits as a mum. I might tried each MLM (multi-level advertising) identified to man.
“I am like, proper, so I must look larger than Tupperware.”
She scrolled via the stream of optimistic content material.
On a regular basis rural girls, promised “private development” and an avenue to “observe your goals” briefly video sermons.
Kylie was speaking about making critical cash.
Ten thousand {dollars} a month. 100 thousand {dollars} a month.
“You’ve got received a younger sheila, dwelling her greatest life, floating round, camp drafting, flash automobile, flash horses, simply working for herself at a younger age,” Kate remembers pondering.
“Who would not need to do what she’s doing?
“I used to be just about sucked into it.”
Multi-level advertising schemes contain people instantly promoting merchandise, normally by leveraging social networks. Folks earn commissions from each the gross sales they make and the gross sales made by others they recruit. Suppose Amway and Tupperware.
In Kate’s case, she’d signed as much as promote water.
Extra particularly, a Kangen alkaline water ionizer and filtration machine.
The units are distributed by a 50-year-old Japanese direct-sales firm known as Enagic, which describes it as an “antioxidant machine”.
“Our ardour is to remodel the faucet water in your house into pure wholesome electrolyzed-reduced and hydrogen-rich ingesting water,” the corporate states on its web site.
To date, there is little scientific evidence that the machine’s alkaline water has any health benefits.
Kate was rapidly funnelled into the Enagic universe and inspired to enroll.
For roughly $6,500 she purchased a Kangen 8 water ioniser, and a field of untamed turmeric capsules, generally known as Ukon.
In common dwell “masterclasses” contained in the Rural Freedom Motion group, members are inspired to purchase a couple of machine, so that they ‘skip the queue’ in a posh fee construction designed by the corporate.
Kate didn’t have spare cash, and was apprehensive about her credit standing, however she says supporters of the Rural Freedom Motion advised her a few cost plan she might entry instantly via Enagic, who provide finance to purchase their merchandise.
Publicly obtainable info on-line reveals if people fail to make funds in the timeframe, the ten per cent each year rate of interest jumps to 25 per cent.
Regardless of repeated makes an attempt to get info from the corporate about these loans, they declined to reply.
The community Kate joined additionally recommends loans via a payday lender, Ausloans in Strathalbyn, South Australia, which advertises unsecured private loans that may appeal to very excessive rates of interest.
The proprietor of Ausloans Strathalbyn can also be an Enagic distributor.
Ausloans Strathalbyn failed to reply to requests for remark.
In the long run, Kate borrowed instantly from Enagic.
When Kate purchased the product, she obtained a distributor quantity.
She was in. All she wanted to do to make her a reimbursement, and repay her mortgage, was to begin making gross sales and recruit different distributors — then they’d be in her ‘downline’ and begin kicking up commissions.
“They promote it in a approach that you’ll make the cash again to pay for this mortgage, that is an funding,” Kate says.
“You simply should promote this many and you will have it paid off inside two months. And you realize, you are in that headspace.”
Secrets and techniques to success
The way in which the scheme works is supposed to be easy.
The extra salespeople you join, the extra gross sales you and your workforce will make.
The upper you rise via the ranks, the extra fee you get.
However whereas guarantees of six-figure incomes and legacy funds abound, Enagic’s personal “efriends” e-newsletter makes it clear that solely a handful will ever attain this stage — with just one or two of the hundreds of Enagic sellers in Australia making the checklist every month.
Revenue disclosures for Enagic within the US additionally present only a few people make important earnings from promoting the units.
Ninety-nine per cent of members there make lower than $US14,000 ($21,000) per yr, and 60 per cent make a median earnings of $285 per yr. This doesn’t embrace what individuals have spent on merchandise or gross sales “teaching”.
The Rural Freedom Motion and its disciples preach that “six-figure” month-to-month incomes are attainable to anybody who tries exhausting sufficient and follows their plan.
As a result of Enagic doesn’t launch earnings disclosures in Australia, there isn’t any information obtainable on precise earnings right here.
As time went on, Kate started to be taught that it was not all about promoting water ionisers.
“They’re like, you have to put your self on the market,” she mentioned.
“Mainly, promoting your self and your life, probably not the product.”
She was advised to subscribe to a web site providing teaching that will be key to her success.
It’s known as The Freedom Period, and it’s run by the highest Enagic sellers in Australia. The creator of the Rural Freedom Motion is of their “downline” and kicks commissions as much as them.
Kate started having second ideas.
“I used to be feeling like a dick, I did not need to put this on my Fb,” Kate mentioned.
However she was $6,500 in debt, so she watched The Freedom Period “masterclasses” and tried to remake herself on social media to generate curiosity and gross sales.
The Freedom Period
It prices $99 per thirty days to entry The Freedom Period coaching assets, which promise to impart the secrets and techniques to internet online affiliate marketing success.
“We’re devoted to the continuous uplevelling of YOU, our household,” the web site states.
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“The Freedom Period is a house for individuals who are bored with giving their life pressure to constructing another person’s dream.
“Shatter the constructs of hustle, burnout, unfulfillment and shortage to recreate a brand new world the place all of us rise and thrive collectively!”
Kate mentioned the location offered detailed directions.
“On Monday, do a publish about travelling,” she recollects.
“On Tuesday do a publish about your loved ones, on Wednesday do an inspirational quote, on Thursday, blah, blah blah.”
The ABC has independently accessed the subscription-only web site, to get a first-hand have a look at the playbook of the multi-level advertising machine.
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In a single part, subscribers are supplied with a “seven step script template” to take care of potential recruits.
They’re instructed to “construct (a) connection” with people on-line.
“Add her as a good friend in your private web page”, it instructs.
“Love coronary heart her remark and observe the scripts beneath.”
There is a sequence of scripted chat message templates to ship to “leads” concerned about becoming a member of the scheme.
Hey babe! How are you? Thanks to your message!
I’m so grateful to be within the on-line area and to create FREEDOM, TIME & WEALTH for my household!
I might like to share the steps I’ve taken and lots of others to create a a number of 6 determine enterprise on-line, what has made you attain out as we speak?
One chat message template refers to an invented boyfriend, “Justin”, who has “retired” from the mines due to the vendor’s MLM success.
Superior! Thanks for sharing this with me!
I completely relate, having retired Justin final yr from the mines, I perceive how exhausting it feels if you find yourself sacrificing your time for cash.
I might like to share extra information with you on how I’ve been in a position to change my life, when do you suppose you’ll have a while to look at a fast video?
I’m so excited to have the ability to join with you and information you to create life in your phrases!
One other describes the enterprise as going past “conventional gross sales”.
Hey babe, I’m positive you really liked the video, it may be slightly complicated what we do on-line as a result of it’s not conventional gross sales!
We deal with constructing our private model, so taking individuals on the journey to create extra freedom by sharing our values & way of life and we leverage the platform for the entire training, studying, help, gross sales & paperwork!
Lots of the enterprise is automated, so our job is actually crafting content material for social media (we’ll educate you this ability)
So many individuals go on a stupendous private growth journey in our neighborhood too!
In case you might be needing slightly extra time or extra information, right here is our hyperlink to our unique group!
Kate joined The Freedom Period and downloaded the assets.
“I printed every part out, I had a folder and I used to be following it,” she says.
However nonetheless, there have been no ‘leads’.
“I used to be beginning to see that this is not as straightforward as they’re making it out to be,” Kate says.
So she reached out to her mentor and founding father of The Rural Freedom Motion, Kylie Stevenson, for steerage.
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The self-appointed “branding skilled” was the lady who appeared on the again of the ute, within the publish that first received Kate .
Kylie has claimed on her social media accounts that she joined The Freedom Period a number of years in the past and has risen via the ranks of Enagic ever since.
In 2023 she advised followers she was on monitor to obtain “5,000 USD each month for the remainder of [her] life” via “legacy” funds.
Her Instagram web page is affected by testimonials from girls in rural Australia, who sing her praises as a mentor.
“Having Kylie there, in entrance of us, paving the way in which…helped me a lot in realising I’m the place I should be, it’s okay, she’s received us,” one follower says.
“If you would like magic in your life, look no additional,” says one other.
Kate’s expertise was completely different.
“There have been fairly just a few occasions the place I’d simply ship her a message, (saying) look this is not working,” Kate mentioned.
“And it was extra, you are not doing the work, that is why it isn’t working.”
Kate persevered. However even when she ultimately had individuals concerned about signing up, she hit one other hurdle – her conscience.
“I simply could not do this to anyone else, I wasn’t going to see any person else go into debt,” she says.
The ABC contacted Kylie Stevenson for a response, however she declined to remark.
We despatched via a sequence of questions in regards to the enterprise construction and earnings information, and whether or not it was cheap to recommend to people getting concerned that they may quickly be incomes $50,000 a month.
She didn’t reply to the questions and suggested she was getting her lawyer concerned.
Kristie and the Wealthy Mystic Man
Kylie is a relative lieutenant in contrast with Kristie Ord and her husband Clint Morgan, two of Australia’s greatest Enagic distributors.
Alongside Rebekah Femia, Kristie and Clint are the “govt workforce” behind The Freedom Period web site that new recruits like Kate are directed to hitch.
In a video obtainable to paid subscribers, Kristie describes her personal choice to depart her company job, dwelling pay cheque to pay cheque, to create a life she had “solely ever dreamt about”.
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Rebekah and Kristie appear sure that something is feasible.
“The system as we all know it … wasn’t really designed for us to really thrive.
“Should you’re right here,” she says, “you’re a freedom seeker.”
“You’re going to be taught all of the instruments to really create a private model so that you could be paid to be your self.
“It would not matter the place you are at in your journey, it would not matter how a lot debt you could have. It would not matter what’s occurred in your life,” she says.
Kristie and Clint have hundreds of individuals of their “downline”, and declare to have made hundreds of thousands in gross sales.
Via The Freedom Period web site, they share gross sales ways, templates for emails and social media posts, and even a chatbot to “convey your advert copy again into compliance.”
Neither Clint or Kristie are listed on The Freedom Period’s enterprise information via ASIC.
A person from Wallabadah in rural New South Wales is listed because the director of a enterprise known as “The Freedom Period”— however he advised the ABC he was not concerned about talking and had nothing to do with it anymore. His companion is an Enagic distributor.
Within the effective print of privateness coverage on The Freedom Period web site, it says “this policy and the use of this Site are governed by Cypress law”.
Cyprus is a identified tax haven, and a search of presidency information there reveals an organization known as “The Freedom Education Era Ltd”, with Balazs Kardos, the world’s primary Enagic salesperson, listed as a Director.
Mr Kardos refers to Clint Morgan as a “actually shut good friend and a enterprise companion.”
Neither Mr Kardos nor Mr Morgan have responded to requests for remark.
When the ABC contacted Ms Ord, she advised the reporter to contact Enagic instantly.
“Don’t harass us,” she mentioned.
After we despatched detailed inquiries to Enagic’s consultant, they mentioned:
“Though all media enquiries are to be directed to Enagic, and to not its distributors, interviews should not carried out.
“We have no idea the idea to your story or curiosity in Enagic or its distributors. Nonetheless, Enagic doesn’t help or take part in media protection of that nature and reserves all its rights in that regard.”
The ABC reached out to greater than 30 present and former distributors linked to the Rural Freedom Motion who had signed as much as promote the water machines.
Most didn’t reply.
The few who did mentioned they had been “not “, or that it was “a very long time in the past” they usually didn’t have something to do with the scheme anymore. None of those that did reply had made their a reimbursement.
The ABC has discovered dozens of Fb teams akin to The Rural Freedom Motion that lie dormant and unused, all utilizing the language taught within the playbooks.
The teams hyperlink to web sites that at the moment are defunct.
MLM or unlawful pyramid scheme?
Multi-level advertising, also called direct promoting or community advertising, entails promoting merchandise via private networks and recruiting different sellers.
“You receives a commission not only for what you promote, however you get a fee on the gross sales of people that you have recruited into the organisation,” mentioned Professor Deanna Grant-Smith, College of the Sunshine Coast.
She has profiled and studied MLMs in Australia and mentioned MLMs aren’t unlawful, and a few individuals do make numerous cash.
“That authorized definition is throughout the truth that it’s in regards to the sale of a services or products. So it isn’t simply paying to enter,” Professor Grant-Smith says..
“There are incentives baked into the way in which that you just earn your cash by bringing extra individuals into the organisation.”
The Freedom Period enterprise is targeted on bringing in additional distributors, indirectly promoting machines.
And the ‘oblique advertising tactic’ is all about dwelling the liberty dream, a laptop computer way of life the place you get out what you set in and eliminate the 9 to five grind.
The query of whether or not an MLM reaches the extent of a pyramid scheme — which is an illegal technique of earning money by recruiting infinite buyers — is within the skill to make real gross sales from the product in query.
As a result of earnings disclosures should not obtainable in Australia for Enagic, it’s inconceivable to say.
“There’s some analysis that was carried out in america that implies that 99 per cent of individuals make no revenue via multi-level advertising,” Professor Grant-Smith says.
“We additionally discovered that not solely had been individuals not earning money, they had been usually not factoring in all of their bills into the judgements they had been making about how a lot cash they had been making.”
Based on the US Federal Commerce Fee, as little as lower than one per cent of MLM members find yourself making a revenue.
“MLM makes even playing appear like a protected wager compared,” the report says.
The Australian Competitors and Shopper Fee has an identical warning.
“Whereas MLM schemes are authorized, sadly within the overwhelming majority of instances, the one individuals who generate profits from them are the creators,” a spokesperson says.
The CEO of the Shopper Motion Legislation centre, Stephanie Tonkin says that the distinction between an MLM and a pyramid scheme could be exhausting to differentiate.
“I discover it very troublesome myself to determine the distinction,” she mentioned.
“Multi-level advertising schemes are authorized nevertheless it’s a effective line between [those and] a pyramid scheme.”
Kate continues to be paying off her debt to Enagic.
The water machine is in a field, and she or he simply threw out the unopened containers of untamed turmeric capsules.
“I wished one thing critical that was going to assist me,” says former Enagic distributor Kate.
“However yeah, it did not kind of work that effectively.”
*Title has been modified
Credit:
Reporters: Nathan Morris and Andy Burns
Story editor: Charlotte King
Illustrations: Lindsay Dunbar
Digital manufacturing: Nathan Morris
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