Advertisements for useless and potentially dangerous products falsely touted as cures for cancer could appear during prime-time television if proposed amendments to therapeutic goods laws go ahead, a former deputy chair of the Australian Competition and Consumer Commission, Allan Asher, has said.

During a public forum held in Canberra on Wednesday to debate the federal government’s Therapeutic Goods Amendment Bill, Asher told attendees the bill would abolish the requirement that advertisements for therapeutic goods be screened by an expert panel before being published or going to air.

Instead, the bill would see the Therapeutic Goods Administration given more powers to impose harsher penalties against manufacturers responsible for spurious and harmful advertising. The TGA believes these increased powers will be enough to deter manufacturers of drugs and complementary and alternative products from making false claims.

But Asher told Guardian Australia that relying on deterrence or prosecuting a manufacturer after an advertisement had gone public would put consumers at risk.

“Thousands of Australian consumers are losing money out of these scams on the internet for products that don’t work, and now these same scams will be able to be advertised in the mainstream media,” he said.

“Far more troubling than money lost by consumers who fall for these scams is the physical harm that will come to people. There is a risk people will buy these products that make outrageous claims for curing dementia, preventing heart attacks or treating cancer, and that people will shun the conventional and effective medical treatment that will actually help them.”

Asher chairs the Complaints Resolution Panel, which operates independently of the TGA and receives complaints about advertisements for therapeutic goods. This panel and its process of pre-vetting ads will be abolished under the bill.

“We have a reasonably tight consumer protection system in Australia and people assume products that are dangerous are subject to enforcement actions,” Asher said.

“But, in the area of therapeutic goods, it is wild west country. The TGA just doesn’t have the resources, experience or knowledge to be an enforcer, and other consumer authorities like the Australian Competition and Consumer Commission have other large matters to work on and don’t usually get involved in disputes about therapeutic goods unless it’s a significant case.

“Until the TGA is given the resources and expertise to regulate advertising of these products and to enforce harsher penalties, the pre-approval process for advertising should stay in place. It may take a few years for the TGA to be properly strengthened, and as it is, it can take up to one year for a complaint about an advertisement to be resolved.”

Currently, manufacturers can make almost any claims about the uses, known as “indications”, for products regarded as reasonably low-risk. For example, a company might indicate that a herbal product will “reduce the severity of colds”. Manufacturers are not required to submit any evidence for these claims before their products are registered.

The bill will see manufacturers restricted to choosing from a limited list of government-approved indications for their products. Health experts and consumer groups called for this list to be kept small to prevent manufacturers from making too many claims about their products.

“Everyone thought that would be a good idea as it would contain the list of crazy claims manufacturers can make, but instead the government has allowed more than 1,000 indications to be included on the list,” Asher said.

“It’s given everyone a big shock that the government took this cavalier approach. The worst of it is the list is government-endorsed, even homeopathy claims included on the list. The government has approved every loopy claim manufacturers wanted to make.”

A spokeswoman for the TGA said the measures in the bill would simplify and improve the handling of complaints about the advertising of medicines and medical devices to the public.

“The changes will also bring increased transparency measures and accountabilities as well as tougher penalties for non-compliance,” she said.

“It should be noted that no other country has an advertising pre-approval process for complementary medicines as they are considered so low risk.”