Doctors are warning a crackdown on the stem cell therapy sector could stifle innovation, amid fears desperate people are being preyed upon by unscrupulous operators.

The use of stem cells offers future promise for medicine, with some providers claiming stem cell therapy can be used to treat strokes, diabetes, spinal cord injuries, cerebral palsy, autism, cancer and multiple sclerosis.

The treatments cost thousands of dollars, and in some cases there is only anecdotal evidence as to whether or not they are effective.

A loophole in the Therapeutic Goods Administration Act allows autologous stem cells - those harvested from a person's body fat - to be exempt from regulation.

Dr Julien Freitag specialises in treating muscular skeletal disorders and is conducting a clinical trial to test the effectiveness of using autologous stem cells in treating arthritis of the knee.

"The result in current research and publications is incredibly promising in osteoarthritis, and hence the research which we are doing," he said.

Dr Freitag has campaigned for a crackdown on dodgy stem cell therapy providers, but says he is wary of tightening regulation.

"What we don't want to do is see such tight regulation that prevents that appropriate development, particularly in a clinical setting," he said.

"It is awfully difficult to take research that we have developed... and then adopt that into clinical treatment.

"On our level, very selfishly, it may affect the research that we do. That's what we want to protect."

Tony McGrath was taking part in the trial to treat arthritis of the knee and was having his first injection when Lateline visited.

"I'm a little bit nervous just like everyone would be but I'm certainly excited about the future," he said.

"Certainly research overseas has shown that it has worked.

"A lot of AFL stars have had it done as well and I'm just as hopeful it can work as well for me as it has overseas."

Questions over treatment success and safety

Autologous stem cells have been used to treat sporting injuries for some years now, and many elite athletes called it career-saving.

One of the most respected stem cell researchers in the field, Professor Martin Pera, cautioned against making such claims until the completion of large-scale, controlled clinical trials.

"They're still unproven, and unless we do proper trials we won't know really whether they doing any good or whether they're safe," he said.

Professor Pera said some stem cell therapy providers were preying on vulnerable people.

"I think it's easy to understand that these are patients with serious illnesses for which there are no current available therapies and of course they will scour the world for any option that might offer them some hope," he said.

And he called on the TGA to close the loophole that exempts autologous cells from regulation.

"For the most part in Australia we have an excellent set of regulations around cell therapy," he said.

"However, there is a loophole in those regulations... and what this has enabled is clinics to offer for sale stem cell treatments that are unproven."

Emotional personal stories used to sell treatment

Doctor Melanie Thomson, a researcher in infectious diseases at the Deakin medical school in Geelong, was recently diagnosed with multiple sclerosis.

A couple of years ago her son was diagnosed with high functioning autism spectrum disorder.

She says she has seen a lot of so-called cures and treatments offered, and says she is on a "quack busting" mission which is both personal and professional.

"I see it as preying on the vulnerable and offering false hope and using the small amount of bona fide scientific evidence for their claims and then taking it - you know give them a scientific inch and they take it three miles," she said.

"They tend to be very clever where they will use semantics to explain their treatments but they tend to cloak most of their treatments with pseudo-science."

She said much of the publicity for untested stem cell treatment was spread via social media, and was often accompanied with emotional personal stories.

"'Anecdata' is a slang word to describe when pseudo-scientists tend to use personal narrative to flesh out their claims," she said.

Dr Freitag said there was an unrealistic level of expectation in the community.

"Conditions like multiple sclerosis and motor neurone disease are very emotive topics so people want there to be a solution," he said.

"Realistically we have to look at what solutions or what possibilities there actually are."