Can travel agencies charge "excessive" fees for cancellation

[WolfAir]

Hey up, I have tried to google this but I keep getting credit card charge info, not if its legal for agencies to (what I think is) overcharge on cancellation.

Basically my wife and kids (3 year old and 7 month old) were off to see her parents. She and my mother found a decently priced ticket (£1100 including taxes) back in July 2016 through an online agency and bought it to fly Dec 2016.
Due to unforeseen circumstances we had to cancel the tickets, the airline charge a cancellation fee of £50 per person including the baby, and then the agency decided they also charge £225 per ticket with no refund for the baby.

I am not sure how they came to £225 charge, but including the airlines charges is basically the whole ticket. Are they allowed to do this? Apparently I am entitled to the taxes back but have yet to receive anything and each time I ring them I get told the person in charge will ring me back, which never happens.
Can I contact some sort of governing body? Or do I suck it up and make sure next time I include cancellation insurance?
Cheers

[WolfAir]

StevieBee said:

Yes they can. The only hope you have is if the terms were not clear at the time of booking or can prove you were not given the opportunity to see them.

In some circumstances, your normal travel insurance covers cancellations (minus as excess) but this is for specific reasons (medical, death in family, etc..).

Cheers StevieBee, yes I tried my travel insurance (with the bank account) and they pretty much said the same.
I only found out about the terms when I came to cancel and the call handler said "We charge £225, its in our terms"
Bit of a kick in the nuts though