Collection Items Law and Legal Definition
Items credited to an owner on receiving payment are collection items. Collection items do not enter the account of a bank until they are paid and proceeds are received. For example, drafts, notes, and government issued warrants. Usually, collection items are received for collection, but credited to a depositor's account only after receiving payment from payor bank or government treasury. Collection items involve additional fees known as a collection charge. Collection charges are imposed for handling and managing collection items.
