Have they never heard of a stop payment?? This story smells like BS to me.
TD Bank won’t refund the money unless he signs an agreement to pay back the bank if someone cashes the lost draft (claiming it does not expire like regular checks).
One imagines the point of a certified check is to preclude the possibility of stopping payment.
However, at least in America, assuming the check is made out to the recipient, rather than cash, the only way the customer could screw the bank is if the recipient cashed the replacement check, and then cashed the original check. If someone forges an endorsement on the check, and the bank doesn’t catch the forged endorsement, the bank is on the hook for that.