More than 21 Aboriginal art centres, leading galleries and high-profile individuals have written to the federal, state and territory governments pleading for action to stamp out “carpetbagging” – unethical art dealing and the exploitation of vulnerable Aboriginal artists – in central Australia.

The letters – from award-winning artists Tony Albert and Del Kathryn Barton, gallerists such as Tim Olsen, writer Richard Flanagan, the Art Gallery of South Australia, the Namatjira Trust, the National Art School and eight Aboriginal art centres from the Tiwi Islands to Adelaide – express concern about the re-emergence of exploitative practices in the Aboriginal art industry.

“We have called police to extricate dialysis patients from painting sheds where they have been locked into premises, and dealt with the stress caused for people in debt to unethical dealers through loans given to them or their family members,” the director of the Purple House dialysis clinic in Alice Springs, Sarah Brown, wrote.

“We have witnessed people being underpaid, paid in alcohol, takeaway food and secondhand vehicles.

“We welcomed some dealers shutting up shop or declaring themselves bankrupt a few years ago. It has been disconcerting to see them re-emerging and becoming more aggressive and unscrupulous in their activities in the past 12 months.

“The behaviour of some dealers is unquestionably worse than we have witnessed before. Unchecked we fear it will become worse still.

“People are often sick, poor and desperate for the quick cash that is available to them through these dealers.”

Sarah Brown says: ‘We have witnessed people being underpaid, paid in alcohol, takeaway food and secondhand vehicles.’ Photograph: Mike Bowers/The Guardian

The director of the Alcaston gallery in Melbourne, Beverley Knight, expressed “utter disbelief” that in her 40 years in the industry “many Indigenous artists are still subjected to unfair practice and slavery”.

“I have many stories that would shock you including slavery, even death of artists,” Knight wrote.

She said that as the Aboriginal art market recovers from the post-global financial crisis slump in 2008, “the same old story surfaces. In fact, now with worldwide attention on many communities and artists across Australia, I believe the federal government needs to act.”

Knight and dozens of others have called for a “total revamp” of the Indigenous Art Code (IAC) to toughen its powers to weed out “dodgy” dealers.

Other writers recommended the Australian Competition and Consumer Commission (ACCC) and police be better supported to protect Indigenous artists.

APY Lands senior female artists Paniny Mick, left, and Wawiriya Burton in front of the APY women’s painting of the seven sisters story. Photograph: Tjala Arts

The APY Art centre, whose members have recently been a target of carpetbaggers, said contending with unethical dealers “has become a dangerous and untenable game of whack-a-mole for art centres.”

“Measures are taken to protect vulnerable artists against one carpetbagger and it is only a matter of time before another one pops up demonstrating the very same unscrupulous and dangerous behaviour,” APY directors Nyurpaya Burton and Tjunkaya Tapaya wrote.

“Unscrupulous private dealers place the health and well-being of our vulnerable artists and staff at risk and cause conflict and violence within our families and communities.”

Carpetbagging has been an issue for APY Lands art centres since 2005, they said, but neither a 2007 Senate inquiry, nor the creation of the Indigenous Art Code in 2009, have made an impact and “further action is needed.”

All 21 letters have called for an urgent meeting of federal, state and territory governments with artists and their representatives.

The minister for Indigenous Australians, Ken Wyatt, said he supports a roundtable with key stakeholders in the Indigenous art industry “to examine these issues and help protect the cultural and economic interests of Indigenous artists.”

“The Morrison government is concerned by the production of fake and inauthentic products and the exploitation of Indigenous artists,” Wyatt said.

“Over the last month, the National Indigenous Australians Agency has been working with art centres and in communities to seek information about individual cases of unethical dealing of Indigenous art.

“We will continue to work with the Indigenous art industry to determine strategies to minimise the risk of exploitation of Indigenous artists through unethical art practices and, where illegal activity is identified, provide this information to the relevant authorities.”

A spokesman for the South Australian premier, Steven Marshall, said: “It is intended the meeting will occur early in the new year.

“It is clear that coordinated action between federal, state and territory governments is needed to address the scope and complexity of the issues involved.”

In the meantime, the APY Art Centre directors said they were working with lawyers, the police and “important Indigenous organisations to deal with the current situation.”

“Indigenous elders like us across the central desert and across Australia have worked hard to grow our art centres,” Burton and Tapaya said.

“Our art centres are often the only sources of non-government income and employment in remote Indigenous communities. They are places where our culture is celebrated and instructed daily to future generations. Our art centres are the instruments elders are using to impact the disadvantage we face in our communities.”